The polyester filament industry is undergoing a profound supply-demand rebalancing. Xinfengming, a leading player, recently released its H1 2026 performance forecast, expecting net profit attributable to shareholders between 1.38 billion and 1.5 billion RMB, representing a year-on-year increase of 94.59% to 111.51%, with non-recurring gains up nearly 140%. This data not only reflects the company's operational success but also signals the entire polyester chemical fiber chain's recovery from overcapacity.
Supply-Demand Restructuring: Production Cuts and Policy Tightening
The core driver of the profit surge lies in the proactive contraction of supply. In late 2025, major domestic polyester filament producers reached a consensus to reduce production of mainstream products like POY and FDY, lowering operating rates. This move directly alleviated supply glut accumulated from years of expansion. Concurrently, the dual-carbon policy raised the bar for new capacity approvals, accelerating the exit of outdated and inefficient capacity, shifting the industry from disorderly expansion to orderly contraction.
Demand-side support was equally strong. Domestic apparel wholesale markets advanced their seasonal transitions, with autumn-winter fabric orders steadily released from Q2, boosting replenishment demand from weaving mills. Overseas, procurement orders from Southeast Asia and European/American brands continued to recover, driving increased purchases of domestic fabrics. The price spread between upstream and downstream products widened, lifting corporate gross margins.
Improved Cost Environment and Integration Advantages
Stable international crude oil prices in Q2 effectively hedged cost fluctuations for chemical fiber raw materials. For leading companies with integrated PTA-spinning chains, this cost stability amplified their competitive edge. Xinfengming, leveraging its self-owned PTA capacity and integrated production system, achieved superior profitability amid raw material price swings. Securities analysts noted that its Q2 quarterly profit hit a historic high.
Global expansion is also progressing steadily. The construction of its production base in Egypt helps diversify single-market risks and lays groundwork for future entry into African and European markets. With industry-wide inventories remaining low and the traditional peak season for apparel in Q3 approaching, downstream weaving mills may accelerate replenishment, potentially extending the profitability cycle for the chemical fiber industry.
Long-term Trends: Greening and High-end Focus
Over a longer horizon, the acceleration of domestic apparel brand globalization is driving demand for functional fabrics and recycled polyester products. Chemical fiber leaders are speeding up adoption of green, low-carbon spinning processes, with the share of differentiated high-end filament products rising. The profit surge of leading companies confirms the recovery of the textile upstream supply chain, while also accelerating the elimination of small, inefficient players, concentrating market share among integrated, scale-advantaged leaders.