Refined cotton sees a significant rise in price once again

After the May Day holiday, the bulk commodity market showed significant differentiation. Precious metals such as gold, silver, manganese, and copper, along with some non-ferrous metals, continued to perform strongly. However, agricultural and industrial products exhibited uneven market conditions. Cotton prices saw a sharp decline, while cotton linter kept firm and continued to rise. Refined cotton followed the upward trend from mid-Mar, with prices soaring once again.

Recently, influenced by multiple factors, Chinese cotton prices experienced a significant downturn. Conversely, since the beginning of 2023/24 crop year (Sep of 2023), Chinese cotton linter prices have been on the rise, showing a stronger trend compared to cotton. The reasons behind this lie in the cost of cottonseed and downstream demand support, primarily due to the contraction in its own supply. Currently, Chinese cotton 3128 price at around 16,000yuan/mt, with a decrease of over 2,500yuan/mt since early Sep last year. Meanwhile, the current price of cotton linter for industry-grade refined cotton in Xinjiang is around 5,000-5,100yuan/mt, with an increase of over 1,200yuan/mt.

With the cotton linter market remaining strong and prices steadily rising, driven by costs and demand from cellulose ether and nitrocellulose companies, refined cotton prices have once again seen a significant increase recently. Some quotations are relatively high, with enterprises primarily selling goods with market trends. Currently, industry-grade refined cotton M1000 in Shandong, Hebei and Xinjiang is quoted at 10,000-10,400yuan/mt, short-distance delivered, with mainstream prices around 9,800-9,900yaun/mt, showing a cumulative increase similar to that of cotton linter.

In conclusion, due to significant differences in market sentiment and supply-demand fundamentals, Chinese cotton prices have seen a substantial decline recently. However, supported by costs and its own supply contraction, coupled with downstream essential demand for restocking, cotton linter prices continue to rise. Driven by both cost and demand, refined cotton enterprises have also substantially raised prices twice, with the cumulative increase being roughly in line with that of cotton linter.