Why the import of US cotton linter declines sharply this year?

Due to various factors such as the poor relations between China and the United States and lower-than-expected downstream demand, the import of cotton linter from the United States has experienced a "cliff-like" decline this year, with import volume shrinking sharply to historically low level.

Given such as the disturbance caused by the China-US relations and ban on Xinjiang cotton, the import volume of US cotton linter has dived since June last year, showing a cliff-like drop. From Oct last year to Jan this year, the import volume remained at zero for four consecutive months. Since Feb this year, the import volume has only been in single digits (in tons). According to customs data, the import volume of US cotton linter in May 2023 was approximately 9.17 tons, a year-on-year decrease of 99.14%.

Based on the cumulative data from the past decade, the average annual import volume of US cotton linter is around 9.4kt. Among them, the highest import volume was in 2021, at approximately 17.7kt. It is expected that this year's import volume will be the lowest, and if the current trend continues, it may not exceed 100 tons for the whole year. From Jan to May 2023, the import volume of US cotton linter was approximately 27.39 tons, a year-on-year decrease of 99.61%, reaching a historical low level.

In the past, US cotton linter has been favored by Chinese refined cotton and nitrocellulose companies due to its good quality and reputation. Over the past decade, the average import share of US cotton linter has remained stable at around 8%. Among them, the import volume in 2019 was about 2.195kt, accounting for 2.5%, which was the lowest level. In 2020, the import volume was 11.485kt, accounting for 15.7%, which was the highest level. However, there has seen a rapid decline this year, with the total import volume of US cotton linter less than 30 tons in Jan-May, taking up only 0.1%.

In conclusion, the import volume of US cotton linter has experienced a drastic decline due to the disruptions caused by China-US relations and the ban on Xinjiang cotton, as well as the combination of factors such as poor downstream demand this year. The import volume in May and the cumulative import volume in the first five months have both decreased by over 99% compared to the same period last year, reaching historically low level. However, following the visit of United States Secretary of State Antony Blinken in Jun, US Treasury Secretary Yellen recently visited China, making the future direction of China-US relations and cotton linter import market trends in the second half of the year worth noting.