Bank of China Securities·2026-02-11 09:21Investment Rating - The industry investment rating is "Outperform the Market," indicating that the industry index is expected to perform better than the benchmark index in the next 6-12 months [12]. Core Insights - The price of dyes has been rising since mid-January, driven by the continuous increase in the prices of reducing agents and other dye intermediates. This upward trend is expected to benefit integrated companies that have stable market shares and relevant intermediate support [2][4]. - The dye industry is characterized by high concentration, with safety and environmental regulations driving continuous optimization of the industry structure. Current dye prices are at historically low levels, and cost pressures are likely to be transmitted downstream [2][4]. Summary by Sections Industry Overview - The dye industry has seen a significant increase in the prices of key intermediates, such as reducing agents, which rose from 25,000 CNY/ton to approximately 70,000 CNY/ton since mid-January. Major companies like Zhejiang Longsheng and Runhua Co. have announced price increases for their products, with price hikes of 2,000 CNY/ton for various dyes [4][5]. - The average prices for disperse and reactive dyes as of February 10 were 21,000 CNY/ton and 23,000 CNY/ton, respectively, reflecting increases of 24% and 5% compared to late January [4]. Market Dynamics - The dye market has been under pressure due to intensified competition, leading to a decline in prices. By 2025, the average export price of disperse dyes is expected to drop by 6.66% year-on-year to 4.36 USD/kg, marking the lowest level in a decade [4]. - China is the largest producer and consumer of dyes globally, accounting for approximately 70%-75% of the world's total dye production. The top five listed companies in China, including Zhejiang Longsheng and Runhua Co., account for 61.07% of the national total dye production [4]. Investment Recommendations - The report recommends investing in leading companies with stable market shares and comprehensive supply chains, such as Zhejiang Longsheng, while suggesting to pay attention to Runhua Co. due to their potential benefits from the improving industry conditions [4].