Polyester Giants' Profit Surge: Industry Cycle Reversal and Structural Dividend Release

In the first half of 2026, two major polyester industry leaders released performance forecasts that made the market re-evaluate a chain once labeled as 'loss-making due to internal competition.' Dongfang Shenghong expects net profit attributable to shareholders of RMB 4.2-5.0 billion in H1, up 987%-1194% YoY, while Hengyi Petrochemical earlier forecast a 2,326%-2,546% YoY increase. Based on public financial data, the Textile World editorial team believes this profit surge is not simple oil speculation but a structural inflection point driven by geopolitical dividends, anti-internal-competition policies, and capacity reduction.

Driving Factors Behind the Profit Surge

Breaking down Dongfang Shenghong's financials, Q1 net profit was RMB 1.432 billion, and Q2 is expected at RMB 2.768-3.568 billion, up 93%-149% QoQ and 60-78 times YoY. This strong sequential growth suggests sustainability. The company's official explanation—'improved supply-demand in petrochemicals, rising crude prices widening product spreads, and stable integrated refining operations'—is just the surface.

Deeper causes: the US-Iran conflict escalation in early 2026 disrupted Hormuz Strait shipping, spiking Brent crude from $61/barrel in January to $118 in March, stabilizing around $99 in Q2. Chinese refiners, with diversified crude import channels, suffered less than Japan and South Korea, becoming beneficiaries of spread expansion.

Meanwhile, the PX-PTA-polyester filament chain reversed its 'internal competition loss' trend. PTA once lost RMB 200/ton, but in 2026, no new capacity was added, and outdated capacity accelerated exit, ceding market share to integrated leaders. Institutional research reports indicate the industry expansion cycle is nearing its end, with 'anti-internal-competition' policies improving supply-demand dynamics.

Deeper Impact on the Polyester Chain

Dongfang Shenghong has 2.8 million tons/year PX capacity and 6.3 million tons/year PTA, with total aromatics chain capacity exceeding 10 million tons. Hengyi gains an edge through its Brunei refining project. This full-chain vertical integration translates into real earnings elasticity during a recovery.

For downstream weaving and fabric companies, raw material costs may shift upward. Although international oil prices have corrected after geopolitical easing, the benefits of anti-internal-competition and outdated capacity clearance are just beginning. The profit surge signals further industry concentration, squeezing SMEs' bargaining power.

From an export perspective, Chinese polyester products are gaining global competitiveness due to cost advantages and stable supply. However, if oil prices remain high, export price transmission to downstream apparel and home textiles may lag, squeezing intermediate margins in the short term.

Practical Recommendations

For Buyers - Monitor PTA and polyester filament price trends; use futures tools to lock long-term procurement costs and avoid passive price hikes during leaders' high-profit periods. - Prioritize long-term partnerships with fully integrated suppliers for better supply stability during raw material volatility. - Assess the survival risk of small suppliers; industry consolidation may accelerate exit of outdated capacity—prepare backup options.

For Exporters - Raise export quotes moderately to capture higher margins from domestic cost advantages, but monitor price sensitivity in Southeast Asian clients. - Include price adjustment clauses in long-term contracts to mitigate履约 risks from oil price volatility. - Optimize FX settlement timing against RMB volatility to lock in export profits.