Cotton linter market summary in H1 2025 and forecast

Looking back at the first half of 2025, cottonseed market showed a strong trend with prices rising steadily. Cotton linter market rose first and then fell, with prices dropping significantly. Looking ahead to the second half of the year, the market is expected to have both positive and negative factors.

In the first half of this year, cottonseed market showed a strong trend with prices rising gradually. The price of cottonseed in Xinjiang increased from 2,100-2,200 yuan/mt at the beginning of Jan to 2,600-2,700yuan/mt at the end of Jun, rising by 500yuan/mt or 23.3%. The main reasons are as follows:

(1). Cottonseed market experienced a deep decline in 2024 (hitting a low of 1,900yuan/mt at the end of Aug), leading to a strong rebound demand this year.

(2). The import volume of cottonseed halved this year, with imports in the first five months reaching 42,649.8 tons, a year-on-year decrease of 49.5%.

(3). As the ginners completed the processing of seed cotton, the supply of cottonseed has decreased, and producers were eager to keep firm prices.

(4). Cottonseed meal once had an independent market trend away from soybean meal, and coupled with a slight increase in demand for cottonseed from pastures, it further supported the strength of cottonseed.

In the first half of the year, cotton linter market rose first and then fell, with prices plummeting, and its trend was significantly weaker than that of cottonseed. The price of cotton linter for industry-grade refined cotton dropped from 4,700yuan/mt at the beginning of Jan to 3,700-3,800yuan/mt at the end of Jun outside Xinjiang. During the same period, the price in Xinjiang dropped by 900yuan/mt or 20% from 4,300yuan/mt to 3,400-3,500yuan/mt. The main reasons are as follows:

(1). The macroeconomic situation was bearish, and market panic once spread. After mid-Feb, cotton linter turned from rising to falling, with prices plummeting.

(2). The import volume of cotton linter increased this year, reaching 49,387.8 tons in the first five months, rising by 12.3%.

(3). On Jan 20, U.S. President Trump returned to the White House and continued to wield the "tariff stick," hindering downstream exports.

(4). VSF market weakened, with dissolving pulp and paper pulp prices falling continuously, which dragged down cotton linter pulp and refined cotton, and in turn had a negative impact on cotton linter market.

To sum up, driven by multiple positive factors, especially the favorable supply side for cottonseed, the market showed a strong trend in the first half of the year, with prices rising steadily, and the overall performance was significantly stronger than that of cotton and cotton linter in the same period. However, due to increased supply and sluggish demand, cotton linter market turned from rising to falling after mid-Feb, with the market situation taking a sharp turn for the worse and prices plummeting.

Looking ahead to the second half of the year, there are still more than 2 months before the arrival of new cottonseed, and there is still an intention to keep firm prices in the short term. However, new cotton will be arriving in Sep, and cotton production will continue to increase in the 2025/26 crop year. After the new cottonseed arrives at the market, the supply will be relatively loose, and cottonseed prices will be under pressure. Recently, cotton linter market has hit the low level seen at the end of Aug last year again, with small fluctuations in the short term. Before and after the National Day, new cotton linter will arrive, but the macroeconomic situation has eased (Sino-U.S. reciprocal tariffs have decreased), and the market is expected to have both positive and negative factors.