The polyester industry is undergoing a dramatic profit reversal. On July 5, 2026, Eastern Shenghong released a performance forecast, expecting net profit attributable to shareholders of listed companies in the first half of the year to be between 4.2 billion and 5 billion yuan, a year-on-year increase of 987% to 1195%. Earlier, Hengyi Petrochemical had forecast a net profit increase of more than 23 times in the first half of the year. The financial data of these two leading companies have put the prosperity of the polyester industry chain in the spotlight.
Dual Engines of Performance Explosion
Shenghong's performance explosion is not an isolated case. According to the announcement, its net profit in the second quarter increased by 93% to 149% quarter-on-quarter, and the year-on-year increase reached 60 to 78 times. The company attributed this to improved supply and demand in the petrochemical industry, rising crude oil prices driving product price spreads, and the smooth operation of integrated refining and chemical projects.
Geopolitical conflicts are the direct driver of oil price increases. In early 2026, the escalation of the US-Iran conflict led to a temporary blockade of shipping in the Strait of Hormuz. Brent crude oil surged from $61 per barrel at the beginning of the year to $118 per barrel in March, with the center of gravity in the second quarter stabilizing at around $99 per barrel. Domestic refining companies, with their diversified crude oil import channels, were far less impacted than countries with single procurement sources such as Japan and South Korea, becoming beneficiaries of oil price volatility.
A deeper structural change lies in the industry's spontaneous 'anti-involution.' In the past two years, the PX-PTA-polyester filament chain was mired in overcapacity, with PTA losing up to 200 yuan per ton at its lowest. In 2026, there was no new capacity added in the PTA sector, while backward capacity at home and abroad accelerated its exit, ceding market share to integrated leaders with scale advantages. Institutional research reports point out that the current round of industry expansion is nearing its end, and the supply-demand pattern is expected to improve further.
Industry Chain Transmission and Regional Effects
The profit recovery of polyester leaders is being transmitted downstream along the industry chain. Shenghong has a PX production capacity of 2.8 million tons/year, a PTA capacity of 6.3 million tons/year, and a total aromatics chain capacity exceeding 10 million tons. This fully integrated vertical chain model allows it to lock in maximum profits when product spreads widen.
For downstream weaving and garment companies, this means an upward shift in the raw material cost center. Polyester filament prices fluctuate with PTA and crude oil, and the pricing power of leading companies is strengthening. Textile clusters such as Shengze and Keqiao will face more rigid raw material procurement costs. However, the exit of backward capacity also reduces the disruption of market dumping, contributing to the overall health of the industry.
It is worth noting that international oil prices have already corrected after the easing of geopolitical conflicts, but the effects of 'anti-involution' capacity clearance are only just beginning to show. This means that even if oil prices fall, the profit margins in the polyester segment may remain at reasonable levels, rather than returning to previous loss-making states.
Practical Insights for Procurement and Foreign Trade
For Procurement Departments - Pay attention to the window for locking in long-term contract prices for PTA and polyester filament. With the enhanced profitability of leading companies, spot market volatility may increase; signing quarterly or semi-annual contracts in advance can help control costs. - Evaluate supplier structure. Prioritize suppliers with integrated PX-PTA-polyester filament production capacity, as their supply stability and cost control capabilities are superior to those of single-segment companies. - Be wary of the risk of terminal orders being squeezed by rapid raw material price increases. If downstream apparel brands cannot accept price increases, the profit margins of intermediate links may be compressed.
For Foreign Trade Companies - Utilize the current window of RMB exchange rate volatility to hedge imported raw materials. The international pricing nature of crude oil and PX makes exchange rate fluctuations directly impact procurement costs. - Monitor capacity changes in Southeast Asian and South Asian markets. If domestic polyester prices continue to rise, some orders may shift to lower-cost regions such as India and Vietnam. - Strengthen communication with downstream brands to explain the rationality of raw material cost increases, avoiding order loss due to price volatility.
This round of profit reversal in the polyester industry is essentially a self-repair of the supply side. For the entire textile chain, short-term cost pressures are rising, but in the long run, a healthy profit structure is a necessary prerequisite for industrial upgrading.