Will cotton linter market regain strong upward momentum?

Recently, cottonseed supply has increased with more harvesting and processing of seed cotton in China, particularly the increment in the volume of machine-picked cottonseed in Xinjiang. Prices came under pressure and declined again, generally at a low level in the past five years. Cotton linter market saw an increase in cautious sentiment, and prices tended to stabilize after rising.

Before the National Day holiday, cottonseed prices rebounded somewhat. After the holiday, influenced by the continuous decline in ZCE cotton Futures, the purchase price of seed cotton gradually decreased. Currently, prices have stabilized after the decline, with the price of machine-picked seed cotton in Xinjiang mostly around 6.1-6.3yuan/kg. Recently, with the increase in the arrival of new cottonseed, especially the significant increase in machine-picked cottonseed after the National Day holiday, combined with the weakening of the cottonseed oil and cottonseed meal market after the holiday, the purchasing pace of cottonseed oil plants slowed down, and the supply pressure of cottonseed became apparent. Prices decreased again, with current cottonseed prices in Xinjiang around 2,000-2,050yuan/mt, a decline of more than 100yuan/mt after the holiday, which was at a low level in the same period over the past five years.

Since late Sep, machine-picked seed cotton harvesting in North Xinjiang has fully commenced. Currently, the average harvesting progress of seed cotton in the northern Xinjiang region has reached 55%, with sales progress exceeding 40%. In early Oct, machine-picked cotton in South Xinjiang has also started to be harvested, with seed cotton harvesting progress about 25% (including hand-picked seed cotton), and sales progress nearing 20%. With the arrival of the seed cotton sales and processing peak period, the production of cottonseed gradually increased, and prices had a tendency to fall more easily than rise. After the National Day holiday, the arrival of new cotton linter was not much, and the price is flat to higher now. The price of cotton linter for industry-grade refined cotton outside Xinjiang is 4,000yuan/mt, while that in Xinjiang is around 3,600yuan/mt, with a post-holiday increase of about 100yuan/mt (about 300-400yuan/mt higher compared to the end of Aug).

In conclusion, with the increase in the arrival of new cottonseed in China, especially the increment in machine-picked cottonseed in Xinjiang, supply pressure became apparent, and prices once again declined. The cotton linter market experienced a rebound from a significant decline. In the context of declining cottonseed prices and weak end-user demand, the overall upward potential is not strong, temporarily stabilizing after rising. The future trends will still need to be monitored based on the progress of seed cotton arrival and the output of cotton linter.