In the first four months of 2026, China's technical textile industry delivered a mixed performance: major product output grew steadily, with nonwovens production up 6.4% year-on-year, and total exports reached $14.82 billion, a 4.6% increase. However, total profits for enterprises above designated size fell 9.6%, and the operating profit margin dropped to 3.4%, down 0.3 percentage points from last year. This 'growth without profit' phenomenon highlights structural pressures beneath the surface of macroeconomic stability.
Output Growth vs. Profit Divergence
According to the National Bureau of Statistics, output of tire cord fabric grew 2% year-on-year, though the pace slowed from the first quarter. Sectoral performance varied sharply: the tarpaulin and canvas segment saw revenue rise 9.2% but profits fall 9.8%, with operating margin at 4.1% still down 0.9 percentage points, indicating severe cost pressure.
Revenue and profits for textile belts and tire cord fabric fell 4.6% and 16% respectively, with operating margin at 3%. Other technical textiles (construction, protective fabrics) saw profits plunge 16.4%, with the highest sub-sector margin of 5% still down 0.8 percentage points year-on-year.
- Nonwovens: revenue down 1%, profit up 0.5%, operating margin flat at 2.5%
- Rope, cord, and cable: revenue up 6.3%, profit up 1.6%, margin 3% down 0.1 percentage points
- Wiping products: wet wipes exports grew 15.6%, disposable hygiene products up 12.3%
Notably, nonwovens was one of the few sub-sectors with positive profit growth, supported by a 12.9% surge in export volume, suggesting scale effects can still offset cost pressures in certain markets.
Export Resilience and Market Shift
China Customs data shows exports of $14.82 billion, up 4.6%, and imports of $1.81 billion, up 3.1%. Coated fabrics, the largest export category, reached $1.74 billion, growing only 1.5%, below the industry average. Nonwovens exports grew 8.4% in value and 12.9% in volume, indicating unit price decline and intensifying competition.
By destination, exports to the US fell 2.9% to $1.75 billion, and to Japan fell 2% to $730 million. In contrast, Vietnam imported $1.16 billion, up 5.6%, becoming the second-largest market. Exports to Belt and Road countries reached $8.9 billion, accounting for 60% of total, up 5.6%. This data signals weakening demand from traditional developed markets, while Southeast Asia and emerging markets are driving growth.
High Raw Material Costs and Supply Chain Risks
From January to April 2026, chemical fiber raw material prices remained high overall. In March, the Middle East conflict and Strait of Hormuz shipping disruptions, combined with post-holiday restocking, pushed up prices across the chain. By April-May, optimism over US-Iran negotiations led to some price declines, but divergence emerged.
Polyester staple fiber and nylon saw price declines due to ample domestic supply. Viscose staple fiber and Lyocell, with low inventories, dissolving pulp cost support, and green demand, saw prices rise as producers held firm. The volatility significantly raised production costs and management pressure. For technical textile firms with thin margins, such cost shocks directly eroded profitability.