Why cotton linter market sees drastic fluctuation in Mar? – ChinaTexnet.com
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Why cotton linter market sees drastic fluctuation in Mar?

2021-04-06 09:31:55 CCFGroup

Cotton linter market saw drastic fluctuation in Mar. Cottonseed oil plants resumed operation slowly back from the Chinese Lunar New Year holiday, so the supply was hard to increase. Moreover, the price of cottonseed price was hard to be talked down. In early Mar, cotton linter supply was tighter and major producers in Shandong, Hebei and Xinjiang generally became reluctant sellers with firm prices, so the market continued to be stronger. In addition, dissolving pulp price also kept rising amid short availability during the same period, so some VSF plants replaced dissolving pulp by cotton linter pulp and some cotton linter pulp mills resumed operation, which sharply boosted the demand for cotton linter. Since the beginning of this year, the cumulative increase of cotton linter price had been around 1,500-1,800yuan/mt as of early-to-mid-Mar.


Since then, the price stopped rising and started to decline at a faster speed in particular around mid-to-late Mar, which was affected by great volatility of bulk commodities, worries over tightening global liquidities and troubled China-EU and China-US relations. Moreover, the sanctions on Xinjiang cotton also caused sharp decline of ZCE cotton futures and cottonseed oil places generally stopped procurement to avoid risks, leading to slipping cottonseed prices. Affected by this, cotton linter trades were almost thin with constant price decline. Till now, the price has been tumbling by more than 800yuan/mt from the higher level.

In addition, imported cotton linter also weighed on Chinese cotton linter price. According to customs data, cotton linter import of China totaled 18,788.3 tons in the first two months of 2021, up 37.4% y-o-y. The import price averages at $275.66/mt (equivalent to around 2,100yuan/mt), down 18.45% on the year. Even if the price of high-quality US linters was far below that of China local market.

Therefore, the price of Chinese cotton linter is still under downward pressure and is expected to be weaker before mid-Apr. The trend afterwards still depends on the external market situation like the development of Xinjiang cotton issue.

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