Lenzing added further pressure to cotton futures, which tumbled 4% for a second day, by ruling out price increases for the rest of the year, and foreseeing world inventories staying high for years, implying long-term pressure on values.
The cellulose fibres group said that, by volume, the world fibre market "should perform well" in the second half of 2013.
"However, there is an excess supply of cotton as well as synthetic fibres and man-made cellulose fibres," Lenzing said.
"Historically-high" cotton stockpiles - pegged by the US Department of Agriculture at a record 86.4m bales worldwide at the close of 2012-13, and seen rising further this season - "will prevent any substantial selling price increases from taking place, even if demand rises".
Peter Untersperger, the Lenzing chief executive, added that the group was assuming that "cotton inventories will still be very high for the next three years including 2013", implying sustained pressure on values.
Chinese boom
As a further drag on cotton prices, values of rival cellulose-based fibres, such as viscose, are being undermined too, in part by excess supplies of the main raw material, so-called dissolving pulp, a typically wood-based solution.
This when Chinese cellulose fibre plants are attempting to ramp up sales as a means of raising cash, at a time of tightened lending requirements.
"As a consequence of the liquidity scarcity, many [Chinese] manufacturers are trying to increase sales volumes as a means of generating cash, even if the earnings situation is unsatisfactory," Lenzing said.
The group forecast "further adjustments", downwards, in cellulose fibre prices it achieves in the second half of 2013, to some E1.70 per kilogramme.
In the first half in which Lenzing recorded a 13.7% drop, year on year, to E1.76 per kilogramme, in the average fibre sales price.
Production hopes rise
The comments added further gloom to a New York cotton market already in retreat from an 18-month high of 93.72 cents a pound reached on Friday, for best-traded December futures.
Cotton futures, after falling the exchange limit in the last session, stood at 85.37 cents a pound at 12:00 New York time (17:00 UK time), down 3.9% on the day and nearly 9% below Friday's high.
The decline has been attributed to a surprise rise, of three points to 46% good or excellent, in the US Department of Agriculture's rating of the domestic cotton crop, which had been seen by many investors as being put on the back foot by dryness in Texas and excess rains in Alabama.
"I was not expecting this, and I do not believe that much of the trade was either," said Tennessee-based consultant Louis Rose said.
Good prospects for India, the second-ranked cotton exporter after the US, have also boosted world supply prospects, with the Cotton Association of India forecasting a 4.6% rise in domestic output in 2013-14.
Hedge fund selling
Selling by hedge funds, which as of last Tuesday had ramped up their highest net long position in cotton futures and options for nearly three years, is also being seen by many observers as fuelling the sell-off.
"There is a good chance that speculative investors will currently be reducing their net long positions again following the sharp increase in the previous week," Commerzbank said.
"Perhaps they are realising once again that marked price rises do not leave demand entirely unscathed."
Spending curbs
Lenzing's comments came as the Austrian-based group revealed investment cutbacks in response to the weak market outlook, with capital expenditure this year expected to tumble 25% to E260m.
"In the future, Lenzing will only spend as much as we earn," the group said.
"Further expansion projects for viscose fibres will only be implemented if correspondingly high profitability is achieved."
The group reported earnings before interest, taxation, depreciation and amortisation (ebitda) for the first half down 16.3% at E193.6m, on revenues down 6.8% at E989.9m.
Lenzing shares closed up 0.4% at E58.00 in Vienna.
