Technical Textiles Industry Under Pressure: Nonwoven Output Surges but Profits Slide

The technical textiles industry delivered a mixed performance in the first four months of 2026. National Bureau of Statistics data show nonwoven output by above-scale enterprises surged 6.4% year-on-year, and cord fabric output grew 2%, indicating steady production expansion. However, total profit plunged 9.6% year-on-year, with operating margin at only 3.4%, down 0.3 percentage points. This suggests the industry is trapped in a "volume up, profit down" dilemma, with profitability under persistent pressure.

Sub-sector divergence deepens: Tarpaulins vs. ropes

Profit trends vary sharply across sub-sectors. The tarpaulin and canvas sector saw revenue rise 9.2% but profit fall 9.8%, with operating margin dropping to 4.1%, the most severe case of revenue growth without profit improvement. In contrast, the rope, cordage, and netting sector achieved revenue and profit growth of 6.3% and 1.6% respectively, maintaining relatively healthy profitability. The nonwovens sector saw a marginal 0.5% profit increase, but its 2.5% operating margin was the lowest among all sub-sectors, reflecting intense competition and low added value. The textile tape and cord fabric sector suffered the steepest profit decline, with revenue and profit down 4.6% and 16% respectively, consistent with the slowdown in cord fabric output growth (only 2%).

Export resilience: US/Japan markets shrink, Belt and Road fills gap

China Customs data offer another perspective: exports totaled $14.82 billion from January to April, up 4.6%, while imports reached $1.81 billion, up 3.1%. The export structure deserves attention: nonwoven exports hit $1.5 billion, up 8.4%, with volume up 12.9%, signaling a clear trend of volume growth outpacing value. Disposable hygiene products exports grew 12.3% to $1.4 billion, and wet wipes exports surged 15.6%, indicating sustained demand for consumer-oriented products.

By market, exports to the US fell 2.9% to $1.75 billion; exports to Japan dropped 2% to $730 million. Meanwhile, exports to Vietnam grew 5.6% to $1.16 billion, and exports to Belt and Road countries totaled $8.9 billion, up 5.6%, accounting for 60% of total industry exports. This suggests that contraction in traditional US, European, and Japanese markets is being offset by growth in emerging markets, though the latter are mostly low-price, high-volume trades with limited profit contribution.

Raw material costs fluctuate at high levels, inventory management critical

From January to April 2026, major chemical fiber raw material prices remained elevated. In March, prices surged due to escalating Middle East conflicts, disruption in the Strait of Hormuz, and post-holiday restocking demand. By April-May, expectations of US-Iran peace talks eased supply concerns, and polyester staple fiber and nylon prices fell as domestic supply became ample. In contrast, viscose staple fiber and Lyocell prices continued to rise due to low inventories, dissolving pulp cost support, and green demand, with producers reluctant to lower prices.

This divergence in raw material prices has directly increased operational costs and management difficulty. For buyers, the decline in polyester staple fiber prices offers a short-term cost improvement opportunity, but the rise in viscose prices means cost pressure on differentiated products remains high. Companies need to adjust procurement strategies flexibly based on product mix to avoid further erosion of already thin margins.

Practical recommendations

For buyers - Take advantage of current lower polyester staple fiber and nylon prices to moderately increase inventory and lock in cost savings, but avoid overstocking given potential volatility. - For viscose and Lyocell, which are rising and supply-constrained, stick to just-in-time purchasing and avoid chasing high prices; monitor dissolving pulp market trends. - Monitor nonwoven export prices closely; if domestic prices fall below export averages, consider import substitution or negotiate with overseas suppliers.

For foreign trade companies - Prioritize expanding into Belt and Road markets, especially Vietnam and Southeast Asia, but be aware of high price sensitivity; differentiate products to strengthen bargaining power. - For declining US and Japanese markets, explore cross-border e-commerce or local warehousing to reduce channel costs, and leverage tariff benefits under RCEP. - With raw material prices high, negotiate floating price clauses with clients or use hedging tools to protect margins from raw material volatility.