The price of intermediates has increased by between 167% and 447%

The price of intermediates has increased by between 167% and 447%

A hike of more than 400% in the cost of chemicals used to make dyestuffs has prompted European textile and clothing manufacturers to call on buyers to pay higher prices for the fabrics used in their products to cover the shortfall.

The European Apparel and Textile Confederation (Euratex) claims the situation is "quickly deteriorating," and says the problem is particularly acute for European textile firms who produce high quality, high fashion and highly sustainable products.

"EU high-quality weavers and finishers are facing an unwarranted and difficult crisis due to unacceptable price-hikes in the dyestuffs market, which impacts the overall competitiveness of this important link of our value chain," explains Alberto Paccanelli, president of Euratex.

Dyestuff prices have been on the rise for more than a year and this, combined with shortages of the raw materials, is leading to problems producing fabrics in required colours and quality standards. Unreliable delivery of dyestuffs is also causing "uncertainty" in order fulfillment, Euratex says.

Another negative factor that the group points to is longer lead-times in the delivery of dyestuffs and even the cancellation of some orders.

As reported on just-style in April, tougher environmental controls in the production of raw materials and intermediate chemicals in Asia, especially in China, have led to the shutdown of production units and a strong reduction in the remaining capacity. The knock-on impact has been seen in higher prices for textile dyes.

Examples of the most impacted intermediate chemicals include H acid, bromaminic acid and anthraquinone derivatives.

In fact, most dyestuff types have been impacted by the current raw materials market situation, including those most widely used in textile manufacturing such as reactive and direct dyes for cellulosic fibres, as well as disperse, acid and metal complex dyes for synthetics and wool fibres.

"Although these regulatory moves are welcomed from an environmental standpoint, it has backfired since our industry and possibly also others (such as the tanning industry) in the EU are experiencing severe shortages and tremendous price rise of the raw materials necessary for our production," adds Francesco Marchi, director general of Euratex.

The European group says its own analysis has concluded that over the past few months the price of some dyestuffs has increased by at least 80%. The intermediates going into the formulation of these dyestuffs have increased by between 167% and 447%.

"It seems that there will be no let-up in the price volatility," Paccanelli notes. "We are facing a long term dilemma as we have a strong indication that investors in China and India are walking away from the chemical sector."

He also claims that the biggest intermediates companies are operating a "suspected cartel" by increasing their "cooperation and partnership" as a way to dictate and impose the price.

The European industry is mainly composed of small and medium-sized enterprises (SMEs), and Paccanelli warns: "The lack of ability of our small companies to pass on the costs in their supply chain due to the pressure on the prices for textiles in the world market means that many companies may simply be going out of business in the very near future."