VSF plants are under bigger pressure of destocking and price slump is an expected issue

In downstream segment, there is currently dual control on total energy consumption and energy intensity, so refined cotton companies in Jiangsu and Shandong are mainly closed due to electricity rationing and the demand for cotton linter will be reduced. The volume of machine-picked seed cotton will be gradually increasing and after new linters arrive on large quantity after mid-to-late Oct, the price is expected to drop, which may be largely stable in the short run.