A Berenberg analyst said that they feel the company is now very frank about communicating that there is a clear dependency of viscose prices to cotton prices (Lenzing’s fibres command a 10-15% premium over cotton). With cotton prices at low levels and Chinese stockpiles very high, pricing is currently weak – a situation that will most likely not change in the very short term. Lenzing will therefore only reach the lower end of its EBITDA guidance this year. In the mid-term, however, cotton dynamics could reverse, as cotton competes for acreage, consumes 27x more water per hectare than corn and there is no drought-resistant seed.
Source: Boerse Express