Cotton linter import of China sees blowout growth in H1 2021

Cotton linter import market was hot in the first half of 2021 as the prosperity has not been seen for years. The import volume in the first half of the year has exceeded 100kt, which is higher than the whole-year volume in the past four years.

China totally imported 100.7kt of cotton linter in the first half of 2021, up 146.5% on yearly basis, which is close to the volume of 2017 and much higher than the volume for each year of 2018-2020.

The import in the first and second quarter of 2021 totals 35.8kt and 64.9kt respectively, up 56% and 262.3% year on year. In the first half of 2021, the import from India, Turkey and US totals 38.5kt, 36kt and 7.7kt respectively, up 550.4%, 548% and 34% on yearly basis.

In the first half of this year, the average monthly import volume is 16.8kt, up 146.5% year on year. Among them, the import in Apr is the highest at 26kt, hitting new highs since Jun 2016. Although the import in May-Jun decreases m-o-m, it is still at high level.

Import price is generally low due to divergence of origins, different quality and bigger import volume. In the first half of 2021, cotton linter import price falls to almost 15-year low of $324.2/mt. The price of Indian linter is 3.5% lower than average at $312.8/mt, while that of US linter is 33.9% higher than average at $434.2/mt.

Cotton linter import price in Jun 2021 is $350.94/mt, up 2.56% year on year. The price of Turkish linter is 11.2% lower than average at $311.7/mt, while Indian and US linter is respectively 12.8% and 27% higher than average at $395.97/mt and $445.99/mt.

The consumption of cotton linter for staple-grade CLP has increased substantially this year, so cotton linter import from India, Turkey and Brazil rises sharply in the first half of the year. Adding US, the import from the four countries accounts for about 95% of total.

The import by Shandong province takes up more than 1/3 of total in the first half of the year, which is followed by Jiangsu and Anhui, taking up more than 75% of total. Regions of the largest import volume are China’s cotton linter pulp and refined cotton sales clusters.

To sum up, the rising consumption of cotton linter for refined cotton and specialty cotton linter pulp, especially the unexpected increment of cotton linter for cotton linter pulp usage is the major driving force of high price and tight supply of cotton linter this year. Coupled with loose monetary policy and huge price gap between Chinese and imported cotton linter, more imports have been attracted to post sharp growth. However, the import volume in the second half of the year may be much lower than that of the first half with new arrival of cottonseed and cotton linter after Sep. The double increase for the whole year has been confirmed.