CEH Report

Table of Contents

Abstract

During the last decade, the worldwide dyestuff industry has been characterized by significant oversupply, resulting in severe pressure on prices. As a result, most dyestuffs producers have suffered significant financial losses and major restructuring has taken place, especially in the United States, Western Europe and East Asia, including Japan, the Republic of Korea, and Taiwan.

Currently, the major dye sourcing country is China, followed by India, Western Europe (mainly Germany and Switzerland) and Taiwan. Major export markets include Turkey, Brazil, Japan, Indonesia, the United States, the Republic of Korea, Mexico, and Thailand. China has the largest trade surplus, followed distantly by India and Western Europe. Since 2002/2003, both Turkey and Brazil have gradually increased their dependency on imported dyes, as the dye consuming industries have expanded in these countries.

The following pie chart shows world consumption of synthetic dyes:

During 2006–2010, consumption of dyes decreased in North and Central America, Western Europe, and Japan, while it increased in South America, Central and Eastern Europe, the Middle East, Africa, and Asia (with the exception of Japan). Japan was hit hard during the 2008/2009 economic recession. Other Asian countries were not hit as hard.

Consumption of dyestuffs is governed predominantly by several factors. The primary long-term factor is demand for textiles, leather and colored paper. Consumption of textiles, the largest end-use market for dyestuffs, in turn depends directly on population growth and private (consumer) spending levels. The most important short-term factor is fashion, which dictates the types of colors used. The quantity of dyestuffs consumed per textile volume is considerably higher when bright or dark colors are desired than when only light colors are in demand. Hence, the colors used for textiles have an impact on the total consumption of dyestuffs. A lesser but still potentially important factor is the substitutability of organic pigments for dyes, particularly in the textile printing segment but also in other segments such as plastics and inks. On the other hand, specialty dyestuffs may also substitute for pigments in selected markets; an example is the dyeing of modified polypropylene fibers, which are normally pigmented.

Asia will continue to be the largest and fastest growing market for textile dyes, as textiles remain a high-volume traded commodity produced in this region.

In recent years, new legislation has affected dyestuff producers' product portfolios. For instance, the European Commission banned many azo dyes in 2002 and navy blue (a chromate-based azo dye, one of the most widely used dyes in the leather industry) in 2004. Restrictions on azo dyes have impacted major dye and textile exporting countries such as India. China and India, which together account for some 66% of global dye production, are sensitive to such regulations. The ban on vat and azo dyes in some countries has paved the way for reactive and disperse dyes in India. REACH (an EU regulation of chemicals), which was enacted in 2007, also affects consumption of synthetic dyes. In China, several dye and textile factories have been closed by the government for being either too polluting or too energy intensive. Both Chinese and Indian textile dyes and chemicals suppliers are faced with the challenge of reducing pollution and optimizing the use of resources.

The dyestuff industry clearly faces numerous challenges in this decade, but ample opportunities will also present themselves for the most agile and innovative producers. For example, the paper and specialty dyes markets are likely to show growth opportunities. Manufacturing of paper chemicals is increasingly becoming concentrated in Asia's emerging markets, where the future growth in the paper industry will originate.