Polyester Giants Surge: Shenghong's H1 Net Profit Soars Up to 12x, Marking Industry Inflection Point

Polyester giants' earnings forecasts have sent shockwaves through the industry, signaling a rapid shift from bottom to boom. On July 5, Shenghong released its H1 2026 guidance, projecting net profit of RMB 4.2-5.0 billion, up 987%-1,195% year-on-year. Combined with its Q1 net profit of RMB 1.432 billion, Q2 alone surged 93%-149% sequentially and an astonishing 60-78 times year-on-year. This follows Hengyi's earlier guidance of 2,326%-2,547% growth, cementing the sector's earnings recovery. Three forces drive this turnaround. First, geopolitical tensions pushed Brent crude from $61/bbl in January to $118/bbl in March, with Q2 averaging $99/bbl. China's diversified crude imports cushioned the impact, benefiting domestic refiners. Second, anti-involution policies halted new PTA capacity in 2026 while phasing out outdated units, ending the price war that once caused PTA losses of RMB 200/ton. Industry analysts say the expansion cycle is ending, improving supply-demand dynamics. Third, Shenghong's integrated capacity—2.8 million tons of PX, 6.3 million tons of PTA, and over 10 million tons of aromatics—amplifies profit leverage when spreads widen. For downstream textile mills, rising polyester feedstock costs signal margin pressure. However, capacity consolidation also promises more stable supply and pricing, reducing the volatility that plagued buyers. The key is proactive procurement and risk management. Practical advice for buyers includes monitoring PTA futures, prioritizing suppliers with integrated capacity, and building cost pass-through mechanisms into contracts. For exporters, it means adding price adjustment clauses, leveraging China's supply chain stability as a selling point, and locking in long-term partnerships with leading producers before more capacity exits the market.