The Zhitong Finance App learned that Guolian Minsheng Securities released a research report saying that since 2025, multiple supply shocks have been compounded, and the continuous tightening supply pattern has driven the market price of H acid to continue to rise, increasing production costs for active and acid dyes. Extremely high market concentration has significantly enhanced supply-side synergy, and the bargaining power of manufacturers has increased, driving the price of reduced products to a sharp rise. Under rigid restrictions on the supply of intermediates, integrated dye companies are expected to usher in a sharp rise in volume and price in the short term as demand is released during the peak season. Long-term demand for textile printing and dyeing has been stable, and rising intermediate prices have raised the profit center of leading integrated dyes.
The main views of Guolian Minsheng Securities are as follows:
incident
On July 28, 2026, Baichuan Yingfu data showed that Dachaidan Hexin Technology's latest factory price of H Acid was 100,000 yuan/ton, up about 150% from 40,000 yuan/ton at the beginning of the year. In the same period, the price of core intermediate reduction products reached 120,000 yuan/ton. On July 21, Zhejiang Longsheng and Runtu Co., Ltd. raised prices simultaneously in the second round of the month. The Dispersion Black 300% series increased by 3,000 yuan/ton, while the rest of the varieties were uniformly raised by 1,000 yuan/ton.
Shortage of supply boosts the price of H acid
H acid is a key intermediate raw material for the production of active, acidic and direct dyes. The production process of H acid involves high-risk sulfonation and nitrification reactions, and environmental and safe production pressures exist for a long time. Multiple supply shocks have been compounded since 2025: (1) Liyuan Technology's 4,500 tons/year H acid nitrification plant explosion was damaged; (2) the H acid unit load was limited after the fire in Wuhai Yadong, and production was still unable to operate at full capacity; (3) The H acid production capacity of Leedu Co., Ltd. has been suspended for a long time since May 2023. The effective domestic production capacity of H acid is less than 60,000 tons/year. The continuous tightening supply pattern is driving the market price of H acid to continue to rise, increasing the production cost of active and acid dyes.
Highly concentrated supply boosts prices of reduced products
Reductants are irreplaceable core raw materials for disperse dyes. Reduced product production involves high-risk nitrification and hydrogenation processes. Environmental protection and safety regulations have existed for a long time, making it difficult to approve additional production capacity. Currently, the effective domestic production capacity is only 48,000 tons. Currently, only three companies, Ningxia Zhongsheng New Technology, Zhejiang Longsheng, and Leetu Co., Ltd., have stable mass production qualifications. Extremely high market concentration has significantly enhanced supply-side synergy, and the bargaining power of manufacturers has increased, driving the price of reduced products to a sharp rise.
The cost transmission path is smooth, and the rise in dyes is expected to continue
The competitive pattern of the domestic dye industry has been optimized to provide a foundation for cost transmission. CR4 for disperse dyes reached 70.69%, and CR4 for reactive dyes reached 64.91%, leading companies had pricing power. After off-season consumption in April-May, outsourced manufacturers' stocks of H acid and reducing products have dropped to a low level, and subsequent production requires the purchase of high-priced stock. As the “gold nine silver ten” peak season for textiles in the third quarter approaches, demand for downstream printing and dyeing stocks is gradually released, and the tightening supply and demand pattern will help the cost pressure to be transmitted smoothly.
It is recommended to focus on
(1) An integrated dye enterprise with a dual intermediate layout: Zhejiang Longsheng. (2) Dye enterprise with integrated production capacity supporting reduced products: Leap Tu Co., Ltd. (3) New H acid production capacity climbing dye company: Jinji Co., Ltd. (4) Dye company with expectations for the resumption of production of H acid plants and strong performance elasticity: Jihua Group.
Risk warning: The recovery in demand for downstream textile clothing fell short of expectations; changes in environmental protection and production safety supervision policies; new production capacity investment of intermediates in the long term; there is an unexpected risk of production safety in chemical production facilities; and the progress of dye prices fell short of expectations after raw material prices rose.