Brent crude oil prices experienced significant volatility in the first half of 2026, leading to divergent financial performances among listed companies across the crude oil industry chain, according to Wind data.

As of July 28, multiple A-share petrochemical and textile companies have released their semi-annual performance forecasts, with integrated refining and chemical enterprises generally reporting strong profit growth, while the profit trends in the chemical fiber and textile sectors have shown stark divergence.

Integrated Refining and Chemical Companies See Profit Recovery

Based on semi-annual reports, leading integrated refining and chemical firms, including Hengli Petrochemical Co., Ltd. (hereinafter referred to as "Hengli Petrochemical"), Rongsheng Petrochemical Co., Ltd. (hereinafter referred to as "Rongsheng Petrochemical"), Jiangsu Eastern Shenghong Co., Ltd. (hereinafter referred to as "Eastern Shenghong"), and Hengyi Petrochemical Co., Ltd. (hereinafter referred to as "Hengyi Petrochemical"), have all forecast substantial year-on-year profit increases for the first half of the year.

Hengli Petrochemical expects net profit attributable to shareholders of the listed company to be approximately RMB 7.2 billion, a year-on-year increase of 136.06%. Rongsheng Petrochemical forecasts net profit between RMB 5 billion and RMB 5.2 billion, representing a year-on-year surge of 730.45% to 763.67%. Eastern Shenghong anticipates net profit between RMB 4.2 billion and RMB 5 billion, a year-on-year jump of 987.39% to 1194.51%. Hengyi Petrochemical projects net profit between RMB 5.5 billion and RMB 6 billion, a massive year-on-year increase of 2326.31% to 2546.88%.

Several companies cited the widening of spreads on major products as the primary reason for the increased profitability. Eastern Shenghong stated that rising costs and tight raw material supply pushed petrochemical product prices upward, broadening product spreads and enhancing overall profitability. Hengli Petrochemical noted that the marginal optimization of supply and demand dynamics in the petrochemical industry, coupled with a steady recovery in sector sentiment, led to a significant improvement in processing spreads compared to the same period last year.

Gong Yun, investment director at Beijing Yuankun Venture Capital Co., Ltd., commented that the profit recovery for integrated refining and chemical companies is primarily driven by the dual benefits of expanding processing spreads and low-cost inventory. During an oil price uptrend, previously purchased crude oil generates inventory appreciation gains. Conversely, during a price downturn, the rapid decline in crude procurement costs, combined with the lag in adjusting downstream chemical and refined product prices, further widens processing spreads.

Downstream Pressure Mounts

In the chemical fiber industry, several companies reported profit increases for the first half of the year. Companies like Yantai Tayho Advanced Materials Co., Ltd., Pingdingshan Shenma Industrial Co., Ltd., and Suzhou Longjie Special Fiber Co., Ltd. (hereinafter referred to as "Suzhou Longjie") attributed their profit growth to higher selling prices for their main products. Suzhou Longjie stated that downstream market demand expanded steadily in the first half of 2026, and the company deepened its focus on high-end products, accelerating the expansion of high-value-added categories. This led to synergistic increases in both sales volume and prices for core products, a significant improvement in product mix, and enhanced overall profitability compared to the prior year.

However, unlike the concentrated chemical fiber leaders, the downstream textile industry is characterized by highly dispersed market participants and intense competition. Most textile orders are locked in at fixed prices in advance, making it difficult for companies to pass on the newly added costs from rising chemical fiber raw material prices to buyers. The cost pressure transmitted from upstream cannot be easily released outward, ultimately squeezing the profit margins of the textile manufacturing segment.

Wind data shows that several A-share textile companies are forecasting losses for the first half of the year. Specifically, Hunan Huasheng Co., Ltd. expects a net loss attributable to the parent company of between RMB -28.5 million and RMB -20 million. Xinlong Holding (Group) Co., Ltd. (hereinafter referred to as "Xinlong Holding") expects a net loss attributable to shareholders of the listed company of approximately RMB -3 million. Huafang Co., Ltd. expects a net loss attributable to the parent company of approximately RMB -44 million. All three companies cited rising raw material prices as the main cause of their losses. Xinlong Holding disclosed that fluctuations in crude oil prices led to significant increases in the prices of bulk raw materials like polyester, raising production costs and compressing product gross margins, which deepened the company's first-half losses.

Qu Fang, an investment advisor at Wanlian Securities, said that the sharp rise in prices of PTA, ethylene glycol, and polyester filament yarn in the first half, combined with supply contraction from industry plant shutdowns, allowed chemical fiber companies to achieve profit growth through low-cost inventory benefits and smooth cost pass-through. In contrast, the pressure on downstream textile companies stems from weak downstream demand, which prevents them from transferring the upstream production cost increases.

Gong Yun added that looking ahead to the second half of the year, international oil prices are expected to maintain wide-range fluctuations, and the profit performance of different segments of the industry chain will continue to diverge. The operating stability of the refining and chemical sector is relatively strong, as a volatile market can help broaden processing spreads, with profits likely to remain at mid-to-high levels. The internal structural division within the chemical fiber industry will further intensify, with leading companies able to leverage mature inventory management systems to hedge against price volatility risks, while smaller and medium-sized firms may face losses if they mismanage the timing of raw material procurement. The profit trend for the terminal textile industry remains highly dependent on the recovery strength of end-consumer demand. Companies with their own brands and overseas production capacity will demonstrate stronger resilience against cyclical downturns.