Output is accelerating and revenue has turned positive, yet total profits remain in contraction territory. The operating data for China's technical textiles industry in the first five months of 2026 reveals resilience under macroeconomic pressure, but also exposes widening profitability gaps among sub-sectors.
Output Accelerates, But Profits Remain Under Pressure
According to the National Bureau of Statistics, output of nonwovens by enterprises above designated size grew 9.5% year-on-year in Jan-May, with the growth rate accelerating by 5.6 percentage points compared to the same period in 2025. Cord fabric output increased 3.8%, accelerating by 3.4 percentage points. However, profit improvement lagged. Industry-wide operating revenue edged up 1.7%, while total profits continued to decline, with the decline narrowing to 3%. The operating profit margin stood at only 3.6%, down 0.2 percentage points year-on-year.
This indicates that the industry remains in a 'revenue growth without profit growth' phase. The output increase stems more from capacity utilization improvement and new capacity release than from strong demand pull. The persistently low profit margin suggests that cost pressures and terminal price competition continue to squeeze corporate profitability.
Sub-sector Divergence: Nonwovens Stand Out
Profit divergence is the most prominent feature of the first five months. Nonwovens saw operating revenue and total profits rise 2.5% and 9.9% respectively, with the operating profit margin improving by 0.2 percentage points to 2.7% – the only sub-sector to achieve positive profit growth. Tarpaulins and canvas saw revenue jump 8.5%, but profits fell 5.7%, with the margin declining 0.6 percentage points. Rope, cordage, and netting revenue grew 1.8%, but profits plummeted 9.7%.
- Nonwovens: Benefiting from stable demand in hygiene materials and filtration media, profit elasticity is significantly better than other categories.
- Textile belts and cord fabrics: Revenue fell 4.1%, but profits only declined 2.4%, with the margin improving by 0.1 percentage points, reflecting effective cost control and product mix optimization.
- Other technical textiles (construction, protective): With an operating margin of 5%, the highest in the industry, but profits fell 11.5%, indicating high risk alongside high margins.
This divergence reflects differing demand conditions in end-use markets. Demand for hygiene and medical applications is relatively rigid, while construction and industrial sectors are more sensitive to fixed asset investment cycles.
Export Growth Steady, Market Structure Optimizing
Customs data shows that technical textiles exports reached US$18.81 billion in Jan-May, up 5.3% year-on-year; imports were US$2.28 billion, up 3.1%. While export growth is modest, it is resilient against the backdrop of slowing global trade.
By product, nonwovens exports reached US$1.93 billion, up 10.7%, with volume reaching 770,000 tons, up 13.4% – a healthy combination of volume and price growth. Coated fabrics ranked first in export value at US$2.19 billion, but growth slowed to 1%, indicating a mature market. Absorbent textiles (diapers, sanitary napkins) exports were US$1.76 billion, up 10.7%; wet wipes exports reached US$490 million, up 14.7%, suggesting ongoing global restocking of pandemic-related supplies.
By destination, the US, Vietnam, and Japan were the top three markets, with exports of US$2.21 billion, US$1.48 billion, and US$940 million respectively, growing 3.5%, 8.3%, and 0.9%. Exports to Belt and Road countries reached US$11.34 billion, up 5.5%, accounting for nearly 60% of total exports. Market diversification is evident, with Southeast Asia and Central Asia emerging as new growth poles.
Geopolitical Premium Fades, Cost Logic Shifts
In June, international oil prices fell sharply as tensions between the US, Israel, and Iran eased, navigation through the Strait of Hormuz improved, and oil producers like Iraq planned to accelerate output. The geopolitical premium that had supported chemical fiber prices is rapidly unwinding. Polyester and polypropylene prices weakened, nylon filament ran soft, and polypropylene fiber began a downward trend. Only viscose staple fiber traded in a volatile uptrend amid conflicting cost support and demand pressure.
For technical textiles companies, this means raw material cost support is weakening. If oil prices continue to fall in the second half of the year, chemical fiber prices may decline further, benefiting nonwovens and cord fabric manufacturers that rely on these inputs. However, downstream buyers may adopt a wait-and-see attitude, potentially causing order delays.