The technical textiles industry is undergoing a deep adjustment characterized by volume growth but thin margins. From January to May 2026, revenue of enterprises above designated size turned positive, growing 1.7% year-on-year, but total profits still fell 3% year-on-year, with an operating profit margin of only 3.6%. This means for every 100 yuan of revenue, companies earn only 3.6 yuan, below the manufacturing average. The core contradiction lies in capacity expansion outpacing demand release, while cost-side pressures have not eased significantly.
Production Accelerates, Nonwovens Lead
According to the National Bureau of Statistics, nonwoven output grew 9.5% year-on-year from January to May, and tire cord fabric output rose 3.8%, with growth rates accelerating by 5.6 and 3.4 percentage points respectively compared to the same period in 2025. The acceleration is driven by sustained demand from downstream hygiene, filtration, and packaging materials. However, the nonwoven industry's operating profit margin was only 2.7%, up slightly by 0.2 percentage points, still at a low level. This suggests companies are relying more on scale expansion to maintain revenue rather than product upgrades or differentiation to capture premiums.
Exports Grow Steadily, Structure Diverges
Customs data show that from January to May, technical textiles exports reached $18.81 billion, up 5.3% year-on-year. Nonwoven exports were $1.93 billion, up 10.7%, with volume reaching 770,000 tons, up 13.4%, indicating downward pressure on unit prices. Industrial glass fiber products exported $1.02 billion, up 12.2%, becoming another growth pole. In contrast, exports of tarpaulins and tents declined—tent exports fell 1.2%, and canvas dropped 1.4%—reflecting weak demand in outdoor and construction sectors.
By destination, the US remained the largest market with $2.21 billion in exports, up 3.5%. Exports to Vietnam reached $1.48 billion, up 8.3%, reflecting active intermediate goods trade amid supply chain regionalization. Exports to Belt and Road countries totaled $11.34 billion, accounting for 60% of total exports, with a growth rate of 5.5%, indicating that emerging markets are becoming the industry's export base.
Profit Divergence: Nonwovens Improve, Others Struggle
By sub-sector, nonwovens saw total profits rise 9.9% year-on-year, the only major sub-sector with positive profit growth. In contrast, ropes and cables saw profits fall 9.7%, tarpaulins 5.7%, and other technical textiles (construction, protective) plunged 11.5%. The profit decline is attributed to both poor cost pass-through and customer price pressure. Notably, the 'other technical textiles' sub-sector had the highest operating profit margin of 5%, indicating that niche, high-value-added products still have room for profitability, but volumes are too small to lift the overall industry.
Raw Material Risk: Geopolitical Premium Recedes, Chemical Fiber Prices Under Pressure
In June, international oil prices fell sharply as US-Iran tensions eased, navigation in the Strait of Hormuz improved, and oil producers like Iraq planned to accelerate output. Polyester, nylon filament, and polypropylene prices all weakened or trended downward. As the geopolitical premium recedes, the trading logic for chemical fibers is returning to supply-demand fundamentals. This presents a dual impact for technical textiles companies: lower raw material costs help ease profit pressure, but if end demand does not pick up simultaneously, product selling prices may also be dragged down, creating a situation where both raw materials and finished goods prices fall.
Practical Recommendations
### For Buyers
- Monitor prices of nonwovens and industrial glass fiber products; these have strong export demand and tight domestic supply, leaving limited room for negotiation.
- Tarpaulin and tent products show weak exports, and domestic inventories may rise, offering opportunities for price concessions or extended payment terms.
- Use the window of falling chemical fiber raw material prices to sign short-term floating-price contracts with suppliers.
For Exporters
- Increase market development in Belt and Road countries, which already account for 60% of total exports with stable growth.
- Beware of the declining unit price trend in nonwoven exports; maintain price levels by enhancing product weight, functionality, or brand certification.
- Monitor trade policy changes in the US and Vietnam, especially tariffs and compliance requirements for coated industrial fabrics and medical dressings.
