While the textile industry digests the impact of raw material price swings, the half-year reports from upstream chemical giants reveal deeper structural signals. In the first half of 2026, BASF's operating profit surged 137.1% year-on-year, and Wanhua Chemical's net profit exceeded RMB 10 billion, up 64.35%. Meanwhile, Lanxess widened losses and Solvay saw both revenue and profit decline. This mixed landscape indicates that profit distribution in chemical raw materials is undergoing structural shifts, directly affecting procurement strategies for downstream fabric and garment companies.
Regional Disparities Behind Profit Recovery
From a global perspective, the chemical industry's profit recovery is far from uniform. Within Europe, BASF, Covestro, and Wacker successfully returned to profitability, but Evonik saw profit declines and Lanxess deepened losses, suggesting that Europe's rebound relies more on improved spreads in select product lines than on broad demand recovery. The US market is similarly divided: Dow swung to profit, DuPont advanced steadily, while Celanese and IFF experienced profit declines due to pressure in certain segments.
Asia stood out as the brightest spot, especially Chinese refining-petrochemical integration players. Wanhua Chemical reported first-half revenue of RMB 119.316 billion and net profit of RMB 10.063 billion; Hengyi Petrochemical, Eastern Shenghong, and Rongsheng Petrochemical saw net profits multiply several times. This contrast reveals a core logic: companies with integrated upstream refining and petrochemical capacity can hedge against raw material volatility more effectively, while those relying on external intermediate purchases see margins squeezed.
Transmission Effects on the Fiber Chain
This divergence is not isolated; it transmits along the supply chain to textile upstream sectors. Strong profits among integrated players mean that supply of basic fiber raw materials like PX, PTA, and MEG is becoming more concentrated—leading players leverage cost advantages to set prices, potentially forcing smaller suppliers out or into transformation. For downstream fabric mills, this implies reduced bargaining power and more unpredictable price movements.
Meanwhile, the divergence among European specialty chemical companies warrants attention. Covestro and Wacker returned to profit, but Lanxess's widening losses signal potential instability in supply of high-end additives and differentiated fiber raw materials. Some weaving enterprises relying on imported functional finishes or specialty yarns have begun evaluating alternative suppliers to avoid disruption risks.
Event Implications and Industry Judgment
The half-year reports are not just capital market topics; they serve as barometers for textile procurement decisions. The turnaround at BASF and Dow mainly benefited from improved chemical spreads, but the industry has not fully recovered—downstream demand and raw material cost fluctuations will continue to influence profits. This implies that fiber raw material prices will likely remain elevated and volatile in H2 2026 rather than trending downward.
For textile companies, the real opportunity lies in capturing structural spread changes. Sustained profitability among integrated players may keep cost support strong for PTA and polyester filament; meanwhile, contraction in specialty chemicals by some European firms could open windows for import substitution. Companies that adjust procurement strategies early will gain an edge in the next cycle.