The profit curve of the polyester industry drew a steep upward line in the first half of 2026. Following Hengyi Petrochemical's forecast of a net profit increase of over 23 times year-on-year in H1, Eastern Shenghong announced on July 5 that its H1 net profit attributable to shareholders of the parent company is expected to be between 4.2 billion and 5.0 billion yuan, a year-on-year increase of 987% to 1194%. In Q2 alone, Shenghong's net profit reached 2.768 billion to 3.568 billion yuan, up 93% to 149% quarter-on-quarter and 60 to 78 times year-on-year. This data indicates that the PTA industrial chain, which once fell into a 'loss of 200 yuan per ton' quagmire due to overcapacity, is undergoing a dramatic value reassessment.
Dual Engines of Profit Explosion
Shenghong attributed the surge to three variables: supply-demand improvement in the petrochemical industry, oil price hikes widening product spreads, and stable operation of integrated refining projects. Behind these are two main lines of profit recovery in the polyester industry in 2026.
The first line is the sharp oil price volatility triggered by geopolitical conflicts. In early 2026, the US-Iran conflict escalated, blocking the Strait of Hormuz shipping, with Brent crude surging from $61/barrel at the start of the year to $118/barrel in March, and stabilizing at $99/barrel in Q2. China's diversified crude import channels suffered far less impact than Japan and South Korea, which rely on single sources, making domestic refineries direct beneficiaries of the spread expansion. Shenghong, with 2.8 million tons of PX capacity, 6.3 million tons of PTA capacity, and total aromatics chain capacity exceeding 10 million tons, captured the largest spread gains between crude costs and product selling prices.
The second line is the supply-demand improvement driven by 'anti-internal competition' policies. In the past two years, the core contradiction in the PX-PTA-polyester filament chain was price wars due to overcapacity, with PTA losing up to 200 yuan per ton at its lowest. But in 2026, no new PTA capacity was added, while backward capacity at home and abroad accelerated its exit, ceding market share to integrated leaders. Institutional research reports indicate that the current round of industry expansion is nearing its end, and anti-internal competition policies continue to improve supply-demand dynamics. This means that even if oil prices retreat after geopolitical tensions ease, the structural benefits from the clearance of old capacity are just beginning to be released.
The Moat Effect of Integrated Leaders
Shenghong's forecast reveals a key trend: in the transition period of the polyester industry from 'internal competition' to 'capacity clearance', companies with full-chain vertical integration are building increasingly wide moats. Shenghong currently has 2.8 million tons of PX capacity, 6.3 million tons of PTA capacity, over 1 million tons of pure benzene capacity, and supporting capacities for styrene, phenol, acetone, and propylene oxide, with total aromatics chain capacity exceeding 10 million tons. The direct result of this scale advantage is that when product spreads widen, the profit amplification effect per ton is multiplied by the capacity base.
For downstream weaving mills and fabric buyers, this shift means significantly enhanced upstream bargaining power. When leaders like Shenghong and Hengyi double or even decuple their profits in half a year, their ability to pass cost pressure downstream also improves simultaneously. The price fluctuation range of raw materials like polyester filament and PTA may widen compared to the past two years, posing new challenges for procurement cost control.