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China cotton linter market review in 2024

2025-01-21 09:18:07 CCFGroup

In 2024, the cotton linter market experienced a tumultuous and extraordinary year, with significant fluctuations overall. Prices saw a wide range of movement, exceeding 2,000yuan/mt.

Product Early 2024 End 2024 Change High Low Change (yuan/mt)
Cotton 16,160 14,120 -12.62% 17,000 14,000 3,000
Cottonseed in Xinjiang 2,860 2,150 -24.83% 3,200 1,920 1,280
Cotton linter in Xinjiang 4,310 4,280 -0.70% 5,300 3,200 2,100
Cotton linter outside Xinjiang 4,720 4,680 -0.85% 5,700 3,700 2,000

In the first half of 2024, the cottonseed meal and cottonseed oil markets were weak, leading to a stalemate in the cotton by-products market. This resulted in limited output of cotton linter. Due to the contraction in supply and the downstream demand for restocking, manufacturers continued to hold back stocks and quote firmly, leading to continuous price increases, which peaked around early Jun. The price of cotton linter for industry-grade refined cotton outside Xinjiang rose from 4,700-4,800yuan/mt at the beginning of the year to 5,600-5,700yuan/mt by the end of May and beginning of Jun. During the same period, the price of cotton linter for industry-grade refined cotton in Xinjiang increased from 4,300yuan/mt to around 5,300yuan/mt, with a total increase of about 1,000yuan/mt.

After the end of May, due to a significant drop in Chinese cotton prices and its own supply-demand dynamics, cottonseed prices took the lead in slipping in early Jun. By mid-Jun, the cotton linter market weakened with falling prices. In Jul, soybean oil and soybean meal led the commodity market decline, causing sharp fall in cottonseed meal, cottonseed oil, and cottonseed prices. After mid-Jul, the price of cotton linter accelerated its downward trend. In Aug, concerns about an economic recession in Europe and the U.S. intensified, leading to heightened market panic and a widespread collapse in the commodity market. The prices of cottonseed and cotton linter plummeted, with cottonseed prices falling by about 1,200yuan/mt and cotton linter prices slumping by over 2,000yuan/mt, far exceeding market expectations. However, as panic subsided, cottonseed prices rebounded at the end of Aug and beginning of Sep, while cotton linter prices bottomed out. After the National Day holiday, the new arrival of cotton linter was limited, and downstream companies were actively purchasing and restocking, with delinting mills pre-selling in large volumes. Prices continued to rise in Oct, with a cumulative rebound of about 1,000yuan/mt from early Sep to mid-Nov. After mid-Nov, prices initially fell before rising again. By the end of Dec, the price of cotton linter for industry-grade refined cotton outside Xinjiang was 4,700yuan/mt, and in Xinjiang, it was around 4,300yuan/mt, close to the price level at the beginning of the year.

In summary, in the first half of 2024, there was a contraction in the supply of cotton linter, leading to price increases, while macroeconomic disturbances in the second half caused prices to plummet before rebounding. Throughout the year, prices fluctuated significantly, with a range exceeding 2,000yuan/mt. The price at the end of Dec was basically close to the level at the beginning of Jan. However, the journey from the starting point at the beginning of the year to the endpoint at the end of the year resembled a "roller coaster," with intense fluctuations. Looking ahead to 2025, external disturbances are becoming stronger, increasing market uncertainty. However, given the favorable supply-demand dynamics, prices are expected to have upward momentum for corrective fluctuations.

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