The polyester filament industry is undergoing a long-overdue supply-demand rebalancing. Xinfengming, a leading manufacturer, projects its H1 2026 net profit attributable to shareholders at RMB 1.38-1.5 billion, a year-on-year increase of 94.59% to 111.51%, with core profit growth reaching nearly 140%. This is not an isolated corporate event but a signal of cyclical recovery across the entire polyester chemical fiber chain.
Supply-Side Self-Correction
The root cause of this profit surge lies not in a demand explosion but in supply-side rationality. In late 2025, major domestic polyester filament producers reached a voluntary production cut agreement for mainstream products like POY and FDY. Prior to that, the industry was trapped in an expansion race—capacity kept rising, prices kept falling, and companies struggled to convert revenue into profit. The agreement directly eased oversupply.
Simultaneously, dual-carbon policies and tighter approval for new capacity created another supply barrier. Inefficient and outdated capacity is accelerating its exit from the market. This is not a government mandate but a market-driven, voluntary move by leading players. For buyers, this means the era of 'always getting cheap spot goods' is ending.
Demand: Dual Support from Domestic Seasonality and Export Recovery
Profit recovery is also supported by demand. Domestic apparel wholesale markets have shifted their seasonal rhythm earlier, with autumn/winter fabric orders steadily releasing since Q2, driving restocking demand from weaving mills. This reflects both consumer resilience and precautionary inventory building against potential shortages.
Overseas markets are also providing positive feedback. Procurement orders from Southeast Asian and European/American brands continue to recover, maintaining growth in Chinese fabric purchases. Despite geopolitical and currency uncertainties, overseas clients remain dependent on China's chemical fiber supply chain. The resilience of downstream polyester demand has widened product spreads, boosting gross margins.
Crude oil price stabilization in Q2 further reduced raw material cost volatility. Companies with integrated PTA-spinning operations, like Xinfengming, have a stronger cost-control advantage—higher raw material self-sufficiency means greater immunity to oil price fluctuations.
Accelerated Industry Restructuring Squeezes SMEs
Behind the profit surge is an acceleration of market concentration. Brokerage analysis shows Xinfengming's Q2 quarterly profit hit a record high, with its overseas Egypt production base progressing steadily, diversifying single-market risk. Current industry-wide inventory remains low, and with the peak autumn/winter season approaching, downstream weaving mills may engage in concentrated restocking, extending the profitability cycle.
However, this is not a rising-tide-lifts-all-boats scenario for small and medium enterprises (SMEs). The integration advantages, scale economies, and global footprint of leading companies create insurmountable barriers. When industry margins recover, large firms convert them into profits faster, while SMEs face pressure from raw material cost volatility, rising environmental compliance costs, and order migration to larger factories. The industry will accelerate the elimination of inefficient SMEs, with market share concentrating among integrated, scaled leaders.
Looking long-term, the acceleration of domestic textile and apparel brands going global, along with growing demand for functional fabrics and recycled polyester products, is reshaping competition. Leading chemical fiber companies have already invested in green, low-carbon spinning processes and differentiated high-end filament products. The next phase of competition will not be about 'who has the largest capacity' but 'whose products offer higher added value, greater sustainability, and stronger irreplaceability.'