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Insight | Time: Aug 30 2019 10:36AM
Cotton linter market maintains largely stable before new arrival of linters
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Cotton by-product market generally keeps strong. Cottonseed price is gradually rising amid tightening supply. Moreover, cottonseed oil and cotton dreg prices have been going up since late Jul. Cotton linter supply has reduced, but there is less demand from cotton linter pulp mills and refined cotton plants who focus on absorbing stocks, so the price witnesses no big volatility.

Cottonseed price was lower before, besides the usage in delinting and cottonseed oil plants, the consumption of cottonseed has increased sharply in feedstuff. Therefore, cottonseed price of China has been rising from 1,920yuan/mt in early Apr to 2,260yuan/mt in early Jun. The price further gained ground since mid-to-late Jul and the quotation had risen to 2,260-2,300yuan/mt in Anhui and Shandong by mid-Aug.

New cottonseed will arrive soon and cottonseed oil plants are generally running with low operating rates, so few of them purchased high-priced cottonseed. Cotton linter supply has also decreased, but there is less demand from downstream sector, so the increment of cotton linter price is smaller than that of cottonseed. Cotton linter for staple-grade CLP is around 2,700-2,800yuan/mt and that for industry-grade refined cotton is at 3,600-3,700yuan/mt, ex-works in Chinese inland.

Cotton linter market is stable for slightly stronger supported by cost and reducing supply, but new linters will arrive soon and downstream plants are cautious about procurement, so the market is still expected to be largely stable.
[RISK DISCLAIMER] All opinions, news, analysis, prices or other information contained on this report is provided by analyst of Zhejiang Huarui Information Consulting Co., Ltd (CCFGroup) as general market commentary and does not constitute investment advice. CCFGroup will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from use of or reliance on such information.
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