The dye sector's rise against the traditional off-season can no longer be explained by simple supply-demand fluctuations. On August 8, disperse dyes saw another broad price hike, with Disperse Black 300% approaching 30,000 yuan per ton, climbing another step after two rounds of adjustments in July. More notably, the underlying driver—the core intermediate reductor—has stabilized at a historic high of 100,000 yuan per ton, an increase of nearly 300% since the beginning of the year. The surging raw material costs are reshaping the cost structure of the entire printing and dyeing chain, and this trend is unlikely to reverse before the peak season.
Background
Reductor (2-amino-4-acetamidoanisole) is an indispensable raw material for producing black, blue, and purple disperse dyes. According to industry public data, the raw material was quoted at about 25,000 yuan per ton at the end of 2025, surged to 70,000-100,000 yuan per ton by March 2026, and has stood firmly at 100,000 yuan per ton since mid-year. Within months, the price quadrupled, directly pushing up dye producers' costs. Meanwhile, H-acid, the core intermediate for reactive dyes, has seen backward capacity phased out due to environmental regulations. Current effective domestic capacity is less than 60,000 tons, with a supply gap of over 10% year-round. The simultaneous price hikes of reductor and H-acid create a double cost squeeze, significantly reducing resistance to dye price increases.
On the supply side, domestic compliant reductor capacity is only 50,000-60,000 tons, highly concentrated in three companies: Zhejiang Longsheng, Runtu, and Ningxia Zhongsheng New Technology. The industry has minimal room for expansion, and supply elasticity is weak. This means that once downstream demand picks up marginally, supply-demand imbalance will quickly reflect in raw material quotes. If dye companies maintain original prices, their profits would be severely eroded, making price hikes a necessity for operational survival.
Industry Impact
Cost pressure is rapidly transmitting to midstream dyeing mills, which are now in a passive position. August remains the traditional off-season, with average operating rates at dyeing factories nationwide hovering around 60%. Bulk orders are scarce, and most enterprises rely on sampling and small trial orders. Revenue is limited, and with soaring dye costs, profit margins are being compressed quickly. More critically, the industry's supply-demand logic has fundamentally changed: in the past, dyeing mills leveraged capacity advantages to dictate pricing during peak seasons, with expedited fees and fabric premiums common. Now, the trend of spot trading for conventional fabrics is evident, small scattered orders are consolidating, and order resources are concentrating among top-tier customers.
Most dyeing mills suffer from severe process homogenization and lack differentiated competitiveness, gradually shifting the market to a buyer's market. It becomes difficult to independently raise processing fees when facing major customers. Only a few high-end mills with stable quality control and premium customer bases can independently adjust processing charges. Facing rising dye costs, some mills have issued fee increase notices, but weak off-season demand and low acceptance from major customers hinder cost pass-through. Most small and medium mills can only absorb the price difference themselves, making long-term loss-making operations unsustainable.
Peak Season Pass-Through and Responses
In the short term, weak off-season demand means downstream fabric and garment enterprises have yet to feel the cost pressure from higher dyeing fees. But the low-price bearing model cannot last. In September-October, the traditional stocking season will bring a concentrated release of garment and foreign trade orders, and the accumulated cost pressure from dyes and intermediates will transmit downstream step by step. By then, comprehensive dyeing fee increases will become an industry-wide choice, raising costs across the entire textile chain. From fabric mills to apparel brands and end consumers, all will bear the brunt of this dye price surge.
For buyers, now is the time to reassess supply chain costs. High dye prices imply that dyeing fees will likely rise in the peak season, pushing up fabric procurement costs. It is advisable to lock in Q3 dyeing fees in advance, sign medium-term agreements with dyeing mills, and avoid passive acceptance of price hikes during the peak season. Also, consider optimizing fabric structures by increasing procurement of categories less sensitive to dye costs, or partnering with mills that have differentiated processes and stronger pricing power to hedge against cost fluctuations.