Open Source Securities: The dye industry will usher in structural growth opportunities, and industry concentration is expected to continue to increase
The Zhitong Finance App learned that the dye industry will usher in structural growth opportunities in the future as the chemical fiber boom picks up, consumption upgrades drive the expansion of demand for high-end fabrics, and advance the green transformation of printing and dyeing. At the same time, affected by the continuous tightening of environmental protection policies and the drastic increase in the entry threshold for the industry, no new production capacity has been invested in the industry since 2023, small and medium-sized backward production capacity has continued to be cleared, and industry supply is showing a rigid contraction trend. Currently, only a few leading companies have achieved self-sufficiency in core intermediates such as reductants and H acid, and industry concentration is expected to continue to increase. Integrated leaders will fully benefit from the tightening supply and price increase cycle, and profit flexibility will continue to be unleashed.
The main views of Open Source Securities are as follows:
Dye industry: disperse dyes and reactive dyes are the core varieties
Dyes are colored organic compounds that can impart color to fiber materials. Dyes generally have four conditions: color intensity, ability to color, solubility, and dyeing fastness. Among them, disperse dyes and reactive dyes are the core varieties of synthetic dyes. There are many dye classification standards in the industry. Mainstream dyes can be divided according to the three dimensions of origin, application performance, and chemical structure. Disperse dyes are mainly used for dyeing and printing polyester, and can also be used for dyeing vinegar fiber and nylon. Reactive dyes are suitable for natural fiber fabrics such as cotton, linen, silk, wool, brocade, etc.; intermediates made upstream and midstream dyes in the dye industry chain, mainly printing and dyeing downstream, are used in leather, paper and other fields. Dye industry terminals are mainly concentrated in the printing and dyeing textile sector. Demand for disperse dye terminals is closely related to the polyester industry, while demand for active dye terminals is tied to cellulose fiber tracks such as cotton spinning and viscose.
Supply side: High environmental protection and intermediate self-sufficiency barriers limit production capacity expansion, industry concentration continues to increase
The dye industry is a highly polluting industry. Most of the raw materials for production are toxic aromatic hydrocarbons. The process is complicated, the waste emissions are large, and the environmental pressure is outstanding. Since 2020, the industry's environmental protection and carbon reduction policies have continued to be tightened. In 2026, a number of new regulations will be implemented to further raise the entry threshold, strictly control sewage emissions, accelerate the clearance of backward production capacity, and force the green transformation of the industry. In this context, self-sufficiency of intermediates has become a core competitive barrier, with both cost and supply chain advantages. Constrained by strict environmental protection and technical thresholds, small and medium-sized production capacity continues to clear up, the advantages of leading enterprises with integrated supporting capabilities are prominent, and the Matthew effect and pattern differentiation of the industry continue to intensify.
Demand side: The rise in chemical fiber boom supports the demand of the dye industry
Of the downstream demand for dyes, 79.0% is used in textile printing and dyeing. According to public data, disperse dyes are suitable for polyester, and reactive dyes are suitable for cotton and linen. Demand in the non-textile sector continues to expand, and the growth rate of functional dyes is impressive. In 2025, textile and garment consumption picked up and the chemical fiber boom picked up, compounded by the low level of downstream fabric inventories and a gradual recovery in loom operating rates in 2026. Demand for dyes is expected to exceed expectations. At the same time, dyes account for relatively little cost in the downstream printing and dyeing process, the downstream is less sensitive to dye prices, and leading companies in the dye industry have strong pricing power. Domestic dye exports are mainly in Southeast Asia and other regions, and multiple domestic and foreign policies continue to push up the industry's entry threshold and eliminate backward production capacity.
Risk warning: Risk of falling short of implementation of environmental policies, risk of price fluctuations of raw materials and intermediates, risk of production safety, risk of downstream demand falling short of expectations.