In the first half of 2026, the blockade of the Strait of Hormuz disrupted crude oil exports from the Middle East, sending international oil prices on an upward trend. In contrast, domestic coal prices rose but at a notably slower pace than oil, further expanding the cost advantage of coal‑based chemical routes. As a result, coal chemical companies generally reported improved performance for the first half of the year.
Among those coal chemical firms that have disclosed semi‑annual reports or performance forecasts, many posted substantial profit growth, with some recording net profit increases of over 10 times year‑on‑year.
Baofeng Energy, a leading domestic producer of coal‑to‑olefins, achieved operating revenue of RMB 30.198 billion in H1 2026, up 32.33% year‑on‑year; net profit attributable to shareholders reached RMB 9.728 billion, a 70.14% increase. During the reporting period, the company produced 2.9731 million tons of polyolefins (including EVA), up 23.64% year‑on‑year.
Hualu Hengsheng reported operating revenue of RMB 17.162 billion, an 8.87% increase, and attributable net profit of RMB 2.353 billion, up 49.98%. In the second quarter alone, attributable net profit was RMB 1.24 billion, up 43% year‑on‑year.
The most striking profit growth came from Chengzhi Holdings. The company posted operating revenue of RMB 6.147 billion, up just 2.77%, but attributable net profit surged to RMB 290 million, a staggering 1,416.23% increase. The modest revenue change yet huge profit leap is mainly attributed to the widened cost advantage of the coal‑based route following the rise in crude oil prices. Its subsidiary, Nanjing Chengzhi, benefiting from the “coal‑methanol‑olefins” value chain, saw core product prices rise and plant utilization increase since March.
In addition, Huachang Chemical achieved operating revenue of RMB 4.016 billion, up 24.85%, and attributable net profit of RMB 123 million, up 1,026.90%. Jiangsu Sopo expects attributable net profit of RMB 220–250 million in H1, representing growth of 115.96%–145.41%, mainly driven by price increases for its key product, acetic acid. Jinmei Technology turned from a loss of RMB 72.807 million in the same period last year to a net profit of RMB 20.414 million. Yankuang Energy expects attributable net profit of approximately RMB 7.2 billion, up about 53% year‑on‑year.
A direct driver behind these profit increases is the widening oil‑coal price spread. The breakeven oil price for coal‑to‑olefins is around USD 45–55 per barrel, and for methanol and ethylene glycol it is about USD 58 per barrel—both well below current oil price levels. When Brent crude trades above USD 80 per barrel, the cost advantage of coal‑based routes becomes even more pronounced. As this cost edge expands, the profit elasticity of related companies rises accordingly.
In the first half of the year, the average per‑ton profit of oil‑based polyethylene fell by RMB 527 year‑on‑year, and that of oil‑based polypropylene declined by RMB 215; during the same period, per‑ton profit of coal‑based polyethylene increased by RMB 333, while coal‑based polypropylene rose by RMB 1,070. With naphtha prices remaining high, the unit cost of the coal‑to‑MTO route is significantly lower than that of oil‑based or gas‑based routes.
Beyond raw material costs, the technology and equipment levels of coal‑to‑olefins are also evolving. In recent years, coal‑to‑olefins technology has continued to improve, equipment localization has advanced, and project construction costs have decreased, further enhancing project profitability.
On the demand side, early‑year market recovery boosted consumption, and although prices fluctuated sharply after March, downstream players mainly focused on digesting inventories and purchasing on a just‑in‑time basis. Emerging sectors such as photovoltaics, lithium batteries, and electronics drove steady growth in demand for EVA and high‑end polyolefins. Looking ahead to the second half, industry insiders remain broadly optimistic about the coal chemical sector’s outlook.
