China's technical textiles industry is caught in a classic 'volume up, profit down' dilemma. In the first four months of 2026, nonwovens output from above-scale enterprises rose 6.4% year-on-year, and cord fabric output grew 2%, yet total industry profits plunged 9.6%, with operating profit margin shrinking to 3.4%. This divergence between output and profit reveals the real pressures from both cost and demand sides.
Stable output, diverging profits
According to the National Bureau of Statistics, revenue from above-scale enterprises in technical textiles edged down 0.4% year-on-year, but total profits fell by nearly double digits. Sub-sector performance varied sharply. Tarpaulins and canvas saw the fastest revenue growth at 9.2%, but profits dropped 9.8%, with operating margin falling 0.9 percentage points to 4.1%. This 'revenue up, profit down' pattern indicates that raw material price volatility and market competition are eroding pricing power.
Textile belts and cord fabric fared worse, with revenue and profits down 4.6% and 16% respectively, operating margin falling to 3%. Other technical textiles (construction, protective textiles) saw profits plummet 16.4%, though their operating margin of 5% remained relatively high within the industry.
Ropes, cables and cords performed relatively well, with revenue up 6.3% and profits up 1.6%, operating margin only slightly down 0.1 percentage point to 3%. Nonwovens posted a marginal 0.5% profit increase, with operating margin flat at 2.5%, making it one of the few sub-sectors without a significant profit decline.
Export resilience, Belt and Road as growth engine
China Customs data shows technical textiles exports reached $14.82 billion in January-April, up 4.6% year-on-year, while imports were $1.81 billion, up 3.1%. The main drivers were nonwovens and disposable hygiene products. Nonwovens exports hit $1.5 billion (up 8.4%), with volume surging 12.9% to 604,000 tonnes. Disposable hygiene products exports were $1.4 billion (up 12.3%), and wet wipes exports reached $380 million (up 15.6%).
The top three export destinations were the US ($1.75 billion, down 2.9%), Vietnam ($1.16 billion, up 5.6%), and Japan ($730 million, down 2%). Notably, exports to Belt and Road countries reached $8.9 billion, up 5.6%, accounting for 60% of total exports. This share suggests that traditional US and European market fluctuations are being offset by emerging markets.
Coated fabrics, the largest export category, grew only 1.5% to $1.74 billion, below the industry average. Tarpaulins and tents fell 2.9% to $1.51 billion, a rare decline among major categories. Canvas and artificial leather base fabrics also slipped slightly.
High raw material prices, rising cost pressure
In the first four months, key chemical fiber raw material prices stayed elevated. In March, geopolitical tensions in the Middle East and post-holiday restocking drove prices up across the chemical fiber chain. By April-May, expectations of US-Iran talks eased supply concerns, but price trends diverged. Polyester staple fiber and nylon fell due to ample domestic supply, while viscose staple fiber and lyocell rose on low inventories and cost support.
Sharp raw material price swings have significantly raised production costs. For an industry with an operating margin of just 3.4%, every percentage point rise in costs could wipe out a third of profits. The tarpaulin and canvas sector's revenue growth of nearly 10% but profit decline is a textbook example of cost transmission failure. While market risk appetite has somewhat recovered, volatility in global energy and shipping markets remains a threat. Companies need more refined inventory management and cost control.