In the first half of 2026, six major polyester listed companies reported combined net profits exceeding 28 billion yuan, with Hengli Petrochemical leading at 7.2 billion yuan and Hengyi Petrochemical posting a year-on-year increase of up to 2546%. Just 12 months earlier, the combined figure was less than 7 billion yuan. The industry has flipped from a 'loss machine' to a 'money printer'.
Dual Engines of Profit Surge
Two direct drivers stand out: crude oil prices and capacity exit. The US-Iran conflict escalation in early 2026 pushed Brent crude from $61/barrel in January to $118/barrel in March, stabilizing around $99/barrel in Q2. For companies like Hengli with 20 million tons/year refining capacity and Hengyi with its Brunei Phase II project, feedstock cost advantages were amplified. Chinese refiners, benefiting from diversified import channels, suffered less from the Hormuz Strait blockade than their Japanese and Korean peers, becoming direct beneficiaries of the geopolitical premium.
An even more critical factor is industry 'anti-involution'. By end-2025, top polyester producers agreed to cut POY and FDY output, while dual-carbon policies tightened approvals for new capacity. PTA and polyester filament yarn spreads quickly recovered from loss-making territory. Tongkun Group posted net profit of 4.1-4.5 billion yuan, up 273%-310%, explicitly attributing the surge to margin recovery in PTA and polyester filament yarn. Shenghong, with 2.8 million tons/year PX and 6.3 million tons/year PTA capacity, showed high elasticity in the margin expansion cycle.
How Sustainable Is the Capacity-Divestment Dividend?
The core premise of current high profits is: no new capacity. Institutional research indicates that the expansion cycle is nearing its end, with zero new PTA capacity in 2026 and accelerated exit of overseas outdated capacity. But the question remains: when per-ton profits return to hundreds or thousands of yuan, how long can the 'anti-involution' consensus hold? Historical experience suggests the polyester industry is highly cyclical; high profits often trigger capacity expansion by cash-rich companies. Xinfengming, with H1 net profit of 1.38-1.5 billion yuan (up 94%-111%), mentioned 'supply-demand optimization' in its announcement but made no commitment to long-term output cuts.
Another risk is oil prices themselves. If Brent crude falls below $80/barrel, refining margins will shrink rapidly. Hengyi's H1 net profit of 5.5-6.0 billion yuan is highly sensitive to Southeast Asian product spreads, with CITIC Securities already noting that Q1 spread widening may be temporary.
Implications for Downstream Buyers
For fabric and apparel buyers, upstream profit surges directly translate to higher raw material costs. Polyester filament yarn and PTA prices rose steadily in H1 2026, significantly increasing downstream cost pressure. Buyers should watch for two signals: first, if oil prices correct, raw material prices may follow quickly; second, excessive industry profits could trigger antitrust concerns or new capacity announcements.