Will the recovery of cotton linter import sustain?

After experiencing a downturn at the end of last year and early this year, the monthly import volume of cotton linter began to recover since Feb this year. Although the recovery was not as strong as expected, there was still a clear trend of warming up overall.

According to customs data, cotton linter import of China in May 2023 was approximately 6,632 tons, a year-on-year decrease of 59.92% and an increase of 46.68% compared to the previous month. Although there is still a notable year-on-year decline, since February of this year, there has been a m-o-m rise for consecutive four months since Feb this year. In May, the import volume increased by about 320% compared to Jan.

However, due to the huge beginning stocks and weak downstream demand this year, the cumulative import volume has still decreased significantly. From Jan to May 2023, the total import volume was about 18,397 tons, a year-on-year decrease of 70.23%, which is a rare decrease in recent years. The total volume was just above the comparable 2018 level, which was a historically low level in nearly 20 years.

This year, the import price of cotton linter has fluctuated greatly, generally fluctuating within $300-500/mt. In May, the average import price was $438/mt, a month-on-month increase of 0.78% and a year-on-year decrease of 22.96%. In Jan-May, the price averaged at $455/mt, a year-on-year decline of 17.3%. It is significantly lower than the comparable 2022 level, but higher than the level of the same period in previous years, and is generally at the average level from 2018 to 2023.

In terms of imports by destinations, Shandong province took the lead in May, accounting for 45.2%, which was followed by Hunan province that imported cotton linter for the first time for years, accounting for 15.3%. Anhui and Jiangsu saw a significant decline in monthly imports.

In Jan-May, Anhui, Shandong, and Tianjin are the top three regions in the import market, accounting for nearly 68% of the total. Both Hunan and Inner Mongolia saw their first imports for years.

In terms of origins, the concentration of cotton linter imports has greatly increased, mainly from three countries and regions. Among them, the top three origins in May were Turkey, India, and Brazil, accounting for a total of 95.5%. From Jan to May, Brazil, India and Turkey were the top three origins, taking up a total of 89.3%.

To sum up, under the influence of various factors this year, cotton linter pulp and refined cotton market has been recovering slowly, and the demand for cotton linter is not as strong as expected. From Jan to May, the total import volume of cotton linter has decreased significantly, reaching a historically low level in nearly 20 years. However, with the adjustment of China's epidemic prevention and control policy, the economy has shown a spiral upward trend, and cotton linter import of China has also shown a trend of month-on-month growth since Feb.