Profit recovery at the raw material end is reshaping cost expectations across the textile supply chain. In 2026 interim reports from global chemical giants, Wanhua Chemical posted net profit of RMB 10.063 billion, up 64.35% year-on-year; Hengyi Petrochemical, Eastern Shenghong, and Rongsheng Petrochemical saw net profits multiply. These companies are mostly refining-integrated leaders in chemical fiber upstream, meaning the spread for key textile raw materials like PX, MEG, and PTA is widening, repricing cost transmission from the source.
Background
This recovery is not universal. In Europe, BASF reported second-quarter sales of EUR 17.206 billion, with operating profit surging 137.1%; INEOS, Covestro, and Wacker Chemie returned to profit. But Evonik saw profit decline, Lanxess widened losses, and Solvay saw both revenue and profit fall. In the US, Dow and Westlake turned profitable, Ecolab and DuPont advanced steadily, while Celanese and IFF experienced profit drops. Asia stood out: Taiwanese firms collectively returned to profit, most Japanese and Korean companies saw large earnings gains, but Saudi SABIC swung to a loss, a counterexample of regional divergence.
Segment performance also varied. In industrial gases, Linde and Air Liquide grew steadily while Air Products posted large losses; in fertilizers, Yara improved while Mosaic fell into loss; in coatings, leading firms saw steady gains. For textiles, the key takeaway is that the upstream recovery is supply-driven—improved spreads and constrained overseas capacity—not broad demand recovery. If demand falls short, firm raw material prices may squeeze margins for midstream weaving and dyeing.
Industry Impact
For domestic textile clusters, the impact of upstream profit recovery travels along two paths. First, refining-integrated firms like Rongsheng and Eastern Shenghong often have downstream polyester and spinning capacity; their improved profits may stabilize polyester product prices, reducing inventory write-down risks seen in past years. Second, Wanhua's strength in MDI and TDI directly affects cost curves for spandex and PU leather, prompting buyers to reassess supplier pricing.
However, sustainability is questionable. Spread improvements partly stem from constrained overseas capacity, such as European plant shutdowns due to high energy costs—these are temporary. Once overseas plants restart or new capacity comes online, spreads may narrow. Textile firms that stockpile based on an assumption of prolonged raw material rises may repeat past inventory traps. Customs data show no sharp increase in chemical fiber raw material imports in H1, indicating downstream purchases remain need-based and market sentiment is cautious.
From an export perspective, divergent chemical giant earnings reflect regional differences in end demand. European and US profit improvements came more from cost cuts and product mix optimization than from order volume growth; Asian firms' surge relies on cost advantages from integration. Thus, textile exporters should focus on actual consumption momentum in target markets rather than inferring order willingness solely from raw material price trends.