The technical textile industry delivered a mixed performance in the first five months of 2026: revenue grew, but profits remained under pressure. According to the National Bureau of Statistics, revenue of enterprises above designated size increased by 1.7% year-on-year, but total profits fell 3%, with an operating profit margin of only 3.6%. This data reveals a tug-of-war between output expansion and cost erosion.
Divergence Between Output and Profit
Output data sent a positive signal. From January to May, nonwoven fabric production increased by 9.5% year-on-year, accelerating by 5.6 percentage points from the same period in 2025; cord fabric output rose 3.8%, accelerating by 3.4 percentage points. This reflects steady recovery in downstream demand, particularly in medical, hygiene, and filtration materials.
However, the divergence in profitability warrants caution. The nonwoven sector was the only bright spot: revenue up 2.5%, profit up 9.9%, and operating profit margin improving to 2.7%. This indicates the segment has emerged from the price war and achieved both volume and price growth. In contrast, the rope and cable sector saw profits drop 9.7%, tarpaulins and canvas fell 5.7%, and other technical textiles (construction, protective) plunged 11.5%, despite their 5% operating profit margin being the highest in the industry.
This structural dilemma of "revenue growth without profit growth" points to two core issues: raw material cost volatility eroding margins, and homogenized competition weakening pricing power in certain sub-sectors.
Export Engine Steady, Nonwovens Lead
Customs data shows total exports reached $18.81 billion, up 5.3%. Nonwoven fabric exports were $1.93 billion, up 10.7%, with export volume reaching 770,000 tons, a sharp 13.4% increase. The combination of volume growth and stable prices indicates that China's nonwovens have not lost international competitiveness despite rising domestic costs.
Technical coated fabrics topped the list with $2.19 billion in exports but grew only 1%, essentially flat. Absorbent textiles (diapers, sanitary pads) reached $1.76 billion, up 10.7%; wet wipes hit $490 million, up 14.7%. The rapid growth of these high-value consumer goods reflects the industry's shift from intermediate to end-consumer products, moving up the value chain.
By destination, the United States ($2.21 billion), Vietnam ($1.48 billion), and Japan ($940 million) remained the top three. Exports to Belt and Road countries totaled $11.34 billion, accounting for about 60%, with growth of 5.5%. This ratio means future export growth will increasingly rely on emerging markets rather than traditional Western markets.
Geopolitical Premium Fades, Cost Logic Resets
In June, international oil prices dropped sharply as tensions eased between the U.S., Israel, and Iran, navigation through the Strait of Hormuz improved, and oil producers like Iraq planned to accelerate output. This directly impacted chemical fiber raw materials: polyester and polyester staple fiber prices weakened, nylon filament ran weak, and polypropylene began a downward trend. Only viscose staple fiber fluctuated upward due to cost support and pressure.
For buyers, this is an important signal. Geopolitical premiums have loomed over chemical fiber prices for two years, but now this factor is fading, and the industry's trading logic is slowly shifting to supply-demand fundamentals. This means that if demand does not surprise on the upside in the second half of the year, raw material prices may face further downward pressure, easing cost burdens for downstream product manufacturers but also increasing inventory depreciation risks.