The polyester filament industry is undergoing a qualitative shift. Xinfengming's H1 2026 performance forecast shows net profit attributable to shareholders is expected to reach RMB 1.38-1.5 billion, nearly doubling year-on-year, with core profit growth approaching 140%. This is not an isolated financial result but a signal of structural changes in the polyester chemical fiber supply-demand relationship.
Supply Side: From Disorderly Expansion to Orderly Contraction
For years, the polyester filament sector has been mired in overcapacity. Top players expanded aggressively to capture market share, keeping prices of mainstream products like POY and FDY under prolonged pressure and compressing industry gross margins to near-loss levels. The turning point came in late 2025, when major domestic chemical fiber companies reached a voluntary production cut consensus, actively reducing operating rates to ease supply pressure.
Simultaneously, dual-carbon policies have tightened approval for new polyester projects, accelerating the exit of outdated and inefficient capacity. This supply-side contraction is not a short-term fix but a long-term trend driven by both policy and market forces. For buyers, this means the buyer's market characterized by overcapacity and price wars is subtly shifting.
Demand Side: Dual Support from Domestic and Export Markets
In sync with supply contraction, demand is showing positive signs. Domestically, the seasonal transition in China's garment wholesale markets has come earlier, with stable release of autumn/winter fabric orders and a notable recovery in weaving mills' restocking demand. Overseas markets are also recovering, with Southeast Asian and European brands increasing their procurement of Chinese fabrics and garments, keeping downstream polyester demand resilient.
This dual support has widened the price spread between upstream and downstream products. With international crude oil prices stabilizing in Q2, the risk of raw material cost volatility has diminished, further consolidating profit margins for leading companies. Xinfengming's fully integrated PTA and spinning chain has translated into tangible cost advantages and risk resilience.
Industry Transmission: Profits Concentrating on Leaders, Small Players Face Squeeze
Xinfengming's performance explosion is essentially a microcosm of rising industry concentration. Amid supply contraction and demand recovery, companies with integrated, scaled advantages can better hedge raw material price fluctuations while enhancing value through differentiated high-end filament products like functional fabrics and recycled polyester.
For smaller chemical fiber firms, the benefits of this recovery cycle are limited. The accelerated exit of outdated capacity means companies lacking scale and product differentiation face greater survival pressure. From a chain perspective, the profit recovery in upstream chemical fiber will eventually transmit to downstream garment manufacturing and brands through fabric pricing and delivery cycles.