Reserve cotton auctions have maintained a 100% clearance rate for consecutive sessions, which is no coincidence. On September 3, all 8,025.965 tons listed were sold, with an average price of 17,518 yuan per ton, down only 14.74 yuan from the previous day. This seemingly calm fluctuation actually reveals rigid restocking demand from textile mills and a collective market confirmation of the price range. With cumulative transactions exceeding 272,717.986 tons and an average premium of 1,380 yuan per ton, the behavior of buyers deserves deeper interpretation.
Event Background
The September 3 auction continued the high heat of the current reserve cotton rotation. The listed volume of 8,025.965 tons saw a 100% transaction rate, with an average price of 17,518.07 yuan per ton, equivalent to 18,128.61 yuan per ton on a 3128B basis. The highest transaction price was 18,220 yuan, and the lowest was 16,620 yuan, a spread of 1,600 yuan, indicating that quality differences among batches were fully priced by the market.
More critical are the cumulative figures. As of that day, cumulative listed and transacted volumes both reached 272,717.986 tons, with a 100% transaction rate. The cumulative average price was 17,297.21 yuan per ton, with an average premium of 1,380.45 yuan. This suggests that textile enterprises are willing to pay a stable premium above the base price, rather than passively accepting it. The cumulative average price for imported cotton was 17,414.78 yuan, about 418 yuan higher than Xinjiang cotton's 16,996.85 yuan, with a larger premium (1,471.87 yuan vs. 1,146.90 yuan), pointing to recognition of the quality stability of imported cotton.
Industry Impact
The 100% transaction rate first indicates that textile mills' raw material inventories are not ample. Against a backdrop of order recovery or expected recovery, rigid restocking demand drives active participation in auctions. However, narrow price fluctuations suggest the market is not blindly chasing highs—the average daily price movement was less than 15 yuan, far smaller than quality spreads, indicating that buyers are hungry in volume but rational in price.
The persistent premium for imported cotton directly mirrors the domestic-foreign price gap. When the premium for imported cotton exceeds that for Xinjiang cotton by about 325 yuan per ton, textile mills' procurement decisions essentially weigh quality against cost. For enterprises focused on high-count yarns and combed yarns, the stability of imported cotton may offset part of the price difference; factories producing medium- and low-count products tend to prefer cost-effective Xinjiang cotton.
For upstream ginning mills and traders, the average transaction price of 17,297 yuan per ton serves as a reference anchor. Before the new cotton crop hits the market, spot quotes are likely to fluctuate around this range. If futures or spot prices deviate significantly, hedging or arbitrage activities may emerge. For downstream fabric mills and garment companies, raw material costs are stable in the short term, which is conducive to quoting orders. However, attention should be paid to the marginal impact of the remaining reserve cotton volume after cumulative transactions reach 270,000 tons.