In the first half of 2026, six major Chinese polyester listed companies delivered staggering results. Hengli Petrochemical reported net profit of approximately 7.2 billion yuan, up 136% year-on-year. Hengyi Petrochemical posted 5.5-6.0 billion yuan, a surge of 2,326% to 2,546%. Eastern Shenghong recorded 4.2-5.0 billion yuan, up 987% to 1,194%. Rongsheng Petrochemical achieved 5.0-5.2 billion yuan, up 730% to 763%. Tongkun Group reported 4.1-4.5 billion yuan, up 273% to 310%. Xinfengming saw 1.38-1.5 billion yuan, up 94% to 111%. These numbers mark a dramatic shift from prolonged losses to collective explosion.
Oil Dividend: Unexpected Beneficiary of Geopolitical Conflict
The most direct driver is crude oil prices. In early 2026, the US-Iran conflict escalated, disrupting shipping in the Strait of Hormuz. Brent crude surged from $61/barrel in January to $118/barrel in March, stabilizing around $99/barrel in Q2. For integrated refining-chemical giants, rising oil prices directly widened processing spreads for PX and PTA. China's diversified crude import channels cushioned the impact of geopolitical blockades, making domestic refiners net beneficiaries.
Anti-Involution: From Price War to Profit Recovery
In the past two years, the PX-PTA-polyester filament chain suffered from 'involutionary losses,' with PTA losing up to 200 yuan per ton. By end-2025, leading fiber producers agreed to voluntary production cuts, reducing operating rates for mainstream products like POY and FDY. Combined with dual-carbon policy constraints tightening new capacity approvals and accelerating exit of outdated capacity, no new PTA capacity was added in H1 2026. This supply-side optimization, along with exit of uncompetitive capacity both domestically and abroad, allowed integrated leaders to gain market share and restore margins.
Chain Advantage: Scale of Integrated Capacity
The core strength of these six giants lies in full-chain integration. Hengli operates 20 million tons/year refining, 6 million tons/year coal chemicals, 1.5 million tons/year ethylene, and 16.6 million tons/year PTA. Shenghong has 2.8 million tons/year PX and 6.3 million tons/year PTA, with total aromatics capacity exceeding 10 million tons. Rongsheng leverages its world-scale integrated refining unit for continuous optimization. These capacities enabled rapid conversion of crude cost advantages into downstream competitiveness. Hengyi's Brunei Phase II and coal-to-glycol projects further diversify geopolitical risks and expand profit potential.
Sustainability: Dual Tests of Oil and Policy
The sustainability of this boom faces two key variables. First, Middle East geopolitics: oil prices have risen again in H2 2026; continued conflict may further boost refining profits, but de-escalation could narrow spreads quickly. Second, the execution of anti-involution policies: whether voluntary production cuts persist and new capacity approvals remain tight will determine supply-demand balance. Institutional research suggests the industry expansion cycle is nearing its end, with potential for further improvement. However, companies must guard against long-term overcapacity risks.