The polyester industry's 'money-printing' mode appears to be returning. On July 5, Eastern Shenghong released its H1 2026 earnings forecast, projecting net profit attributable to shareholders of listed companies between 4.2 billion and 5 billion yuan, an increase of 987% to 1194% year-on-year. This follows Hengyi's earlier forecast of a 2326% to 2547% surge, putting the profitability of chemical fiber giants back in the spotlight.
The Dual Engines of Earnings Explosion
Eastern Shenghong attributed the surge to three factors: improved supply-demand dynamics in the petrochemical industry, wider product spreads driven by rising crude oil prices, and stable operations of its integrated refining and chemical projects. Quarterly data shows Q1 net profit at 1.432 billion yuan, implying Q2 net profit of 2.768 to 3.568 billion yuan, a sequential increase of 93% to 149% and a year-on-year surge of 60 to 78 times.
This explosion is not isolated. Q1 financial reports from other polyester leaders also showed strong performance. Industry data indicates that the US-Iran conflict in early 2026 disrupted Hormuz Strait shipping, sending Brent crude from $61/barrel in January to $118/barrel in March, with Q2 stabilizing around $99/barrel. China's diversified crude import channels shielded domestic refineries from the supply shock that hit countries like Japan and South Korea, making them beneficiaries of the oil price rally.
Simultaneously, the PX-PTA-polyester filament yarn chain is undergoing a structural 'anti-involution' transformation. Over the past two years, overcapacity led to PTA losses of up to 200 yuan per ton. But in 2026, no new PTA capacity has been added, while outdated capacity at home and abroad is accelerating its exit. Institutional research notes that the industry expansion cycle is nearing its end, and anti-involution policies are expected to further improve supply-demand balances. This means integrated leaders with scale, cost advantages, and high chemical yields are best positioned to benefit from the recovery.
The Long-Term Logic of Capacity Optimization
Eastern Shenghong's capacity includes 2.8 million tons/year of PX and 6.3 million tons/year of PTA, with total aromatics chain capacity exceeding 10 million tons. This full-chain vertical integration allows the company to maximize profits from wider spreads and market share consolidation.
For buyers, this trend implies reduced volatility in upstream raw material prices. The 'involutionary losses' of the past two years caused erratic price swings, but capacity cleanup should stabilize price levels. However, stronger bargaining power among leaders could also lead to structurally higher raw material costs.
Notably, while oil prices have retreated after geopolitical tensions eased, the benefits of anti-involution policies and outdated capacity exit are just beginning to materialize. This suggests the earnings improvement in the polyester chain may be sustainable, not merely a short-term stimulus from geopolitical events.