The polyester industry chain is experiencing a dramatic recovery. On July 5, Dongfang Shenghong released its H1 2026 earnings forecast, projecting net profit attributable to shareholders of listed companies to reach 4.2 billion to 5.0 billion yuan, a year-on-year increase of 987% to 1194%. This echoes Hengyi's previously disclosed net profit surge of 2326% to 2546%, signaling a collective breakout for the polyester sector from over two years of price war quagmire.
Dual Engines Driving Profit Explosion
Shenghong attributed the performance change to improved supply-demand dynamics in the petrochemical industry, expanded product spreads driven by rising crude oil prices, and stable operation of its integrated refining and chemical project. On a quarterly basis, the company's Q1 net profit was 1.432 billion yuan, while Q2 surged 93% to 149% sequentially, with a year-on-year increase of 60 to 78 times, showing astonishing growth acceleration.
Geopolitical conflict was the most visible catalyst in H1. The deterioration of US-Iran relations in early 2026 disrupted shipping through the Strait of Hormuz, sending Brent crude from $61/barrel to a peak of $118/barrel in March, with the Q2 average stabilizing around $99/barrel. China's diversified crude import channels proved advantageous in this volatility, making refiners net beneficiaries of the oil price rally.
Deeper structural changes came from the industry's self-correction on the supply side. The PX-PTA-polyester filament yarn chain suffered severe internal competition in 2024-2025, with PTA losing up to 200 yuan per ton at its lowest. In 2026, zero new PTA capacity was added, while outdated capacity both domestically and internationally accelerated its exit, ceding market share to integrated leaders like Shenghong, which boasts 2.8 million tons of PX and 6.3 million tons of PTA capacity. Institutional research notes that this round of capacity expansion is nearing its end, and anti-internal-competition policies are substantively improving supply-demand balances.
Chain Transmission and Regional Responses
Signals of profit explosion are already transmitting downstream. In textile clusters like Shenghong's base in Shengze, Jiangsu, and Keqiao, Zhejiang, buyers of polyester filament yarn report that while raw material price volatility increased in H1, supply stability from top-tier suppliers significantly outperformed that of smaller players. The advantages of integrated enterprises in raw material self-sufficiency and logistics coordination translated into order concentration during periods of sharp oil price swings.
Notably, although oil prices have pulled back after geopolitical tensions eased, the logic of profit recovery driven by anti-internal-competition measures has not reversed. After the exit of outdated PTA units, the market's supply-demand equilibrium has shifted upward. Even if crude oil falls back to the $80/barrel range, processing margins for industry leaders can still maintain a healthy level of 200-300 yuan/ton, far above the loss-making state of 2025.
Practical Recommendations
For Buyers - Focus on the long-term contract pricing mechanisms of integrated leaders. Lock in raw material costs for 3-6 months during the oil price pullback window to avoid another wave of panic price hikes. - Incorporate suppliers' capacity structure and PTA self-sufficiency rate into evaluation criteria. Prioritize suppliers with full PX-PTA-polyester filament yarn chains to mitigate supply disruption risks.
For Foreign Trade Enterprises - Capitalize on the current window of improved export profit margins for polyester products. Accelerate order signing with clients in Southeast Asia and the Middle East to lock in price advantages. - Monitor the capacity expansion of leading companies like Shenghong and Hengyi in new material directions (such as EVA and acrylonitrile). The stability of their by-product supply may impact delivery schedules for functional fabric orders.
The industry-level judgment is that the polyester sector has emerged from its darkest hour, but high profits are not universal. Only those enterprises that persisted in integrated investment and completed capacity upgrades during the last loss cycle will truly benefit from the recovery. For small and medium-sized weaving mills and traders, now is the time—more than ever—to reassess supply chain resilience and cost structures.