According to Zhitong Finance APP, Debang Securities released a research report stating that, according to Baichuan Yingfu, as of June 9, the market price of H acid was 41,750 yuan/ton, a month-on-month increase of 3.09% and a year-on-year increase of 22.79%, reaching a three-year high. The price of the key intermediate H acid is accelerating, and the support from the cost side may further strengthen. As of June 9, the market price of reactive dyes was 23 yuan/kg, with a month-on-month increase of 4.55% and a year-on-year increase of 9.52%. From the industry structure perspective, China's reactive dye industry has a high concentration. According to Baichuan Yingfu, the CR4 will reach 64.91% by May 2025. Against this backdrop, the willingness of leading enterprises to maintain prices may be more sufficient, which is expected to drive the further acceleration of reactive dye prices.
<h2>The main points of Debang Securities are as follows:</h2>
Event: According to Baichuan Yingfu, as of June 9, the market price of H acid was 41,750 yuan/ton, a month-on-month increase of 3.09% and a year-on-year increase of 22.79%, reaching a three-year high; during the same period, the market price of reactive dyes was 23 yuan/kg, with a month-on-month increase of 4.55% and a year-on-year increase of 9.52%.
H acid faces significant environmental pressure, with a long-term supply-demand gap
H acid is one of the key intermediate raw materials for producing acidic and reactive dyes, such as Acid Magenta 6B, Acid Red G, Acid Black 10B, Direct Black, Reactive Scarlet K2BP, Reactive Purple K-3R, Reactive Soluble Blue K-R, and more than 90 other types. These dyes are used for dyeing wool and cotton fabrics and can also be used for drug production. However, the wastewater generated during the production of H acid is difficult to treat, characterized by deep color, complex composition, high toxicity, high salt content, and strong acidity, making direct biochemical treatment impossible, leading to high treatment costs. Therefore, the industry has faced significant environmental pressure for a long time.
Historically, many small and medium-sized H acid production enterprises have been eliminated due to failing to meet environmental requirements, and leading enterprises have also been affected, resulting in a significant decline in operating rates and intensified industry reshuffling, with backward production capacity gradually being eliminated. According to RTGF's investor relations records, as of May 2025, the effective production capacity of H acid in China is less than 60,000 tons, with a market effective supply gap of over 10%.
Recently, due to some H acid production enterprises implementing maintenance plans and the impact of a fire accident at the Yadong Fine Chemical Plant in Wuhai City, Inner Mongolia in April, the industry's operating rate has continued to run at a low level. In addition, due to frequent production safety accidents in chemical enterprises, domestic supervision of safety production and environmental protection is expected to increase. The clearing of the H acid industry may continue for a long time, and the industry concentration is expected to continuously improve, achieving sustained optimization of the structure.
Rising raw material H acid prices support the upward movement of reactive dye prices
Reactive dyes are used for dyeing fabrics such as cotton and linen, with over 70% of global cotton textile printing and dyeing relying on such dyes, while the important raw material intermediate H acid accounts for about 30-50% of the production cost of reactive dyes. According to Baichuan Yingfu, as of June 9, the market price of H acid was 41,750 yuan/ton, a month-on-month increase of 3.09% and a year-on-year increase of 22.79%, reaching a three-year high.
Debang Securities believes that due to the relatively rigid downstream demand for reactive dyes and the significant proportion of H acid's value, the price transmission mechanism from H acid to reactive dyes may be quite effective. Since 2021, the price of reactive dyes has been maintained at around 21 yuan/kg, but starting from Q3 2024, it has been affected by weak downstream printing and dyeing demand, falling to 19 yuan/kg
Subsequently, due to the strong export of main raw materials, support has been formed on the cost side, opening up an upward channel for the price recovery of reactive dyes.
In this round, the key intermediate H acid has accelerated its price increase, and the support from the cost side may further strengthen. As of June 9, the market price of reactive dyes is 23 yuan/kg, a month-on-month increase of 4.55% and a year-on-year increase of 9.52%. From the industry perspective, China's reactive dye industry has a high concentration. According to Baichuan Yingfu, the CR4 will reach 64.91% by May 2025. Against this backdrop, the willingness of leading enterprises to maintain prices may be more sufficient, which is expected to drive the further acceleration of reactive dye prices.
Recommended Targets
JinJi (300798.SZ), JiHua Group (603980.SH), RTGF (002440.SZ), HaiXiang Pharmaceutical (002099.SZ), Zhejiang Longsheng (600352.SH).
Risk Warning
Environmental inspection intensity is less than expected, downstream demand is less than expected, significant fluctuations in raw material prices, safety production risks

002440

603980

600352

300798

Debang Securities released a research report indicating that the market price of H acid continues to rise, reaching 41,750 yuan/ton, a three-year high, with a year-on-year increase of 22.79%. The price of reactive dyes has also risen to 23 yuan/kg, with a year-on-year increase of 9.52%. Due to environmental pressures and supply-demand gaps, industry reshuffling is intensifying, and it is expected that the price support capability of leading enterprises will strengthen, driving further increases in reactive dye prices

Zhitong

RTGF

JiHua Group

Zhejiang Longsheng

JinJi

Environment Protection

HISOAR

Debon Securities: The tightening trend on the supply side continues, focusing on the elasticity of H acid and reactive dyes