In the first four months of 2026, China's technical textiles industry delivered a mixed performance: nonwovens output surged 6.4% year-on-year, and cord fabric output also grew 2%, but profits of above-scale enterprises fell 9.6% year-on-year, with the operating profit margin dropping to just 3.4%, down 0.3 percentage points. The divergence between output and profit highlights the dual pressures of rising costs and squeezed margins.
Output Growth vs. Profit Contraction
Data from the National Bureau of Statistics reveals significant divergence within the sector. Nonwovens production accelerated from stable growth in the first quarter to a 6.4% jump, becoming the brightest spot on the output side. Cord fabric output growth slowed to 2% from the first quarter but remained positive. However, the profit side was far less optimistic: total industry revenue fell 0.4% year-on-year, while total profit dropped nearly 10%.
By sub-sector, profit declines were not uniform. The tarpaulin and canvas sector saw revenue up 9.2%, but profits fell 9.8%, with the operating profit margin dropping from 5.0% to 4.1%, suggesting margin erosion from rising raw material costs or price competition. The textile belts and cord fabric sector saw revenue down 4.6% and profits plunging 16%, with a margin of only 3.0%, the steepest profit decline among all sub-sectors. Ropes, cables, and cords were among the few with both revenue and profit growth—revenue up 6.3% and profit up 1.6%—but margins still edged down 0.1 percentage point. The nonwovens sector saw profits edge up 0.5%, roughly flat year-on-year, but revenue fell 1%, suggesting companies maintained profitability through cost controls or product mix optimization.
What does this mean? For buyers, high-growth areas like nonwovens and disposable hygiene products may face overcapacity risks, while sectors like tarpaulin and canvas with high revenue but low margins signal weakening supplier bargaining power.
Structural Highlights in Exports
Customs data shows technical textiles exports reached $14.82 billion in the first four months, up 4.6% year-on-year, while imports were $1.81 billion, up 3.1%. Behind the export growth, category performance varied significantly.
Disposable hygiene products surged 12.3% to $1.4 billion, and wet wipes grew an even faster 15.6%, indicating robust global demand for personal care and cleaning products. Nonwovens exports grew 12.9% in volume and 8.4% in value, reflecting rising international competitiveness. Technical coated fabrics, the largest export category, reached $1.74 billion but grew only 1.5%, below the industry average. Tarpaulins and tents fell 2.9%, possibly due to softening outdoor activity demand overseas.
By destination, the U.S. remained the largest market, but exports to the U.S. fell 2.9% to $1.75 billion, reflecting trade friction or weak demand. Exports to Vietnam grew 5.6%, while those to Japan fell 2%. Exports to Belt and Road countries reached $8.9 billion, accounting for 60% of total exports, up 5.6% year-on-year. This structural shift suggests foreign trade enterprises should accelerate expansion into emerging markets to reduce reliance on traditional ones.
Raw Material Volatility: Short-Term Risks and Long-Term Strategies
Raw material price trends were a key variable affecting industry profits in the first half of 2026. In March, the entire chemical fiber chain surged due to escalating Middle East geopolitical conflicts and disruptions in the Strait of Hormuz. By April-May, as market expectations for U.S.-Iran talks and strait reopening grew, supply risk concerns eased, and price trends among different chemical fiber varieties diverged.
Specifically, polyester staple fiber and nylon saw prices decline due to ample domestic supply, benefiting companies using these raw materials. Viscose staple fiber and Lyocell, however, faced upward price pressure due to low industry inventories, dissolving pulp cost support, and green demand, with producers reluctant to lower prices. For buyers, this divergence creates different cost environments: nonwovens companies benefit from lower polyester staple fiber prices, while tarpaulin and canvas companies using viscose face rising costs.
Significant raw material price fluctuations have notably raised industry production costs and management pressures. While market risk appetite has somewhat recovered, the situation remains volatile, with risks from international energy and shipping markets persisting.