A chemical fiber company rooted in PTA and polyester has posted a half-year net profit of 5.5 to 6.0 billion yuan, up over 23 times year-on-year. This is not short-term cyclical sentiment but the reality of Hengyi Petrochemical's performance forecast released on June 25, 2026. The entire chemical fiber chain is now reassessing: how long can the Southeast Asian refining bonanza last?
Where Did the Profit Come From?
Hengyi's profit structure has fundamentally changed. In Q1, net profit hit 1.995 billion yuan, a staggering 3,773.77% year-on-year increase. In Q2, it rose further to 3.5-4.0 billion yuan, up 76%-101% quarter-on-quarter. Industry data shows the core engine is the Brunei refinery project. Benefiting from tight supply-demand in Southeast Asian fuel markets, wider spreads, tax incentives, and lower freight costs, the refinery operates at full capacity with consistently high per-ton margins.
The PTA and polyester segments are also recovering. After China's textile industry anti-dumping policies slowed PTA capacity growth, supply-demand dynamics improved, gradually restoring profitability. At the same time, nylon chain capacity release contributed incremental gains. Hengyi's first-half profit is a 'refining windfall plus polyester recovery' double hit.
What Do the Three Major Projects Mean?
Three strategic projects under construction define Hengyi's positioning for the next five years. The Brunei Phase II, with a designed capacity of 12 million tons per year, targets completion by end-2028, bringing total Brunei capacity to 20 million tons. This is the only overseas capacity increment among private large refineries in recent years, highlighting its scarcity.
The Xinjiang coal-to-ethylene glycol project plans 2.4 million tons of fiber-grade ethylene glycol annually, expected to start production in H1 2028. The Jingzhou circular new materials project targets waste textiles, aiming for a 300,000-ton industrial demonstration facility with an 18-month construction period. Once operational, Hengyi will break its sole reliance on crude oil, establishing a 'oil-coal-fabric' raw material system.
For buyers and mills, this means Hengyi's future supply stability and cost control for PTA, ethylene glycol, and polyester chips will significantly improve. The waste textile project, aligned with China's 'dual carbon' goals, may create new recycled fiber supply channels.
Can High Profits Last?
The market questions whether this 23-fold growth is a flash in the pan or a permanent earnings shift. Industry logic suggests the tight supply-demand in Southeast Asian fuel markets is unlikely to reverse quickly, supporting high refining margins for the year. PTA and polyester capacity structures have materially improved, with sustainable profitability recovery.
But risks remain. International crude oil price volatility is the biggest variable—sharp price drops cause inventory losses and narrow crack spreads. The Brunei Phase II and Xinjiang projects are capital-intensive with long timelines, posing delays and funding pressure. Concentrating core assets in Brunei exposes Hengyi to policy or geopolitical shifts. Weak downstream textile demand could disrupt polyester margin recovery.
For textile professionals, Hengyi's case signals a clear trend: upstream raw material profit elasticity is shifting to overseas refining, while domestic PTA and polyester competition has become more rational. Future raw material price swings may depend more on Southeast Asian refinery utilization and international oil prices than domestic supply-demand.