China's technical textile sector posted mixed results in the first five months of 2026. Output of nonwovens by enterprises above designated size surged 9.5% year-on-year, accelerating by 5.6 percentage points from the same period of 2025, according to the National Bureau of Statistics. Tire cord fabric output also grew 3.8%. However, this production uptick did not translate into across-the-board profit improvement. The industry's operating profit margin stood at only 3.6%, down 0.2 percentage points, while total profits fell 3%, with losses widening in some sub-sectors.
Output Growth Masks Profit Divergence
Nonwovens emerged as the standout segment. Revenue rose 2.5% and profits surged 9.9%, with the operating margin reaching 2.7%, up 0.2 points. This dual growth indicates robust demand from downstream sectors like hygiene materials, filtration, and wipes. Export data corroborates this: nonwoven exports hit USD 1.93 billion, up 10.7%, with export volume reaching 770,000 tonnes, a 13.4% jump.
But not all sub-sectors shared the prosperity. The textile belts and tire cord fabric segment saw revenue fall 4.1% and profits drop 2.4%, despite a slight margin improvement to 3.7%, signaling weak demand from automotive tires and industrial belting. Tarpaulins and canvas posted 8.5% revenue growth but a 5.7% profit decline, implying volume-driven growth at the expense of margins. The 'other technical textiles' category (construction, protective textiles) boasted the highest margin at 5%, but profits plunged 11.5%, highlighting intense competition in a niche market.
Exports Grow Steadily as Geographic Mix Shifts
Customs data shows exports of technical textiles reached USD 18.81 billion from January to May, up 5.3%, while imports rose 3.1% to USD 2.28 billion, widening the trade surplus. Coated fabrics led export categories at USD 2.19 billion but grew only 1%, nearing a plateau. Absorbent textiles (diapers, sanitary pads) exported USD 1.76 billion, up 10.7%, and wet wipes surged 14.7% to USD 490 million, reflecting booming overseas demand for personal care technical textiles.
The top three destinations—the US, Vietnam, and Japan—accounted for USD 2.21 billion, USD 1.48 billion, and USD 940 million, respectively, growing 3.5%, 8.3%, and 0.9%. A more structural shift: exports to Belt and Road countries reached USD 11.34 billion, up 5.5%, representing nearly 60% of total exports. This pivot toward Southeast Asia, the Middle East, and Africa demands adjustments in logistics, tariffs, and product certifications for exporters.
Raw Material Costs Decline, Opening a Profit Recovery Window
In June, international oil prices fell sharply as tensions in the Middle East eased, improving navigation through the Strait of Hormuz. Iraq and other producers plan to accelerate output. This directly depressed polyester and nylon filament prices, while polypropylene began a downward trend. With geopolitical premiums fading, the chemical fiber market is gradually returning to supply-demand fundamentals.
For technical textile producers, lower input costs are a near-term tailwind, especially for nonwovens and coated fabrics that rely heavily on polyester. But profit recovery ultimately depends on downstream demand. The profit declines in tarpaulins and tire cord fabrics show that cost relief alone is insufficient—capacity utilization and product mix upgrades are the long-term solutions.