Tug-of-war in cotton linter: cost support vs. weak demand

Cotton linter market has recently been locked in a stalemate, with prices trapped in a dilemma of neither rising nor falling. Is this driven by firm costs or sluggish demand? A breakthrough in the market outlook will rely on improvements on either the raw material or demand side.

As the 2025/26 crop year draws to a close, cottonseed market is entering a supply gap phase. Stocks of old-crop cottonseed are being depleted, while new-crop cottonseed is yet to hit the market, restricting available spot supplies. Producers are inclined to hold firm on prices. Since mid-Apr, cottonseed prices have mostly stabilized in Xinjiang and Shandong. Current cottonseed prices stand at around 2,500-2,550yuan/mt in northern Xinjiang (prices are slightly higher in southern Xinjiang), while Xinjiang-origin cottonseed traded in inland regions costs roughly 3,000-3,050yuan/mt, with limited price swings lately. Backed by cost support, cotton linter prices have seen muted volatility. The quotations remain steady, though buyers negotiate down transaction prices.

Hit by economic cycles and supply-demand fundamentals of the industry, downstream cellulose ether producers are running with low operating rates this year. Refined cotton producers in Hebei, Shandong, Jiangsu and Xinjiang face weak demand and widespread stockpiles, indirectly curbing their consumption of cotton linter. Meanwhile, demand for cotton linter used in staple-grade cotton linter pulp has declined this year, throwing cotton linter market into structural oversupply. At present, enterprises sell cotton linter flexibly at market prices. Cotton linter for industry-grade refined cotton in Xinjiang is quoted at 3,400-3,500yuan/mt recently, with most transactions closing at 3,300-3,400yuan/mt, and some spot deals transacting at even lower prices.

In summary, cotton linter market remains deadlocked with prices caught in an upward-downward dilemma. On the raw material front, cottonseed market is facing a supply gap with tightening spot supplies and producers resisting price cuts. Cost support has largely ruled out sharp declines in cotton linter prices, leaving only minor price fluctuations. On the demand side, consumption of cotton linter for staple-grade cotton linter pulp is subdued and refined cotton demand stays lackluster, with a portion of cotton linter building up as inventory at downstream plants. Supported by costs and weighed down by weak demand, cotton linter market is mired in a tug-of-war, lacking momentum for sharp price swings in the short term.