On September 7, reserve cotton sales again hit a 100% transaction rate, with an average price of 17,402.55 yuan per ton, down merely 8.16 yuan from September 4. The price, converted to 3128B grade, stayed above 18,030 yuan. This underscores robust demand from textile mills as the traditional peak season approaches, reinforcing strong price support.
Transaction Structure Reveals Demand Preferences
All 8,007 tons listed were sold, with a spread of 1,670 yuan between the highest and lowest bids, indicating clear differentiation in quality expectations. Imported cotton achieved higher average prices and premiums than domestic Xinjiang cotton, with an average premium of 727 yuan. This preference is not purely price-driven but reflects the consistent quality and spin-ability of imported cotton for high-end yarn production.
Cumulative data through September 7 show total reserve cotton sales of 288,725 tons, a 100% transaction rate, and an average premium of 1,347 yuan. Imported cotton commanded an average premium of 1,420 yuan, significantly higher than Xinjiang cotton's 1,147 yuan. This highlights the irreplaceable role of imported cotton in spinning recipes, especially for mills producing high-count or compact yarns where consistent fiber quality is crucial.
The narrow price change of only 8 yuan suggests a market in equilibrium, yet the persistent 100% transaction rate indicates a structural supply gap rather than speculative stockpiling. This gap appears ahead of the new cotton harvest, implying concerns about quality or timing of new crop arrivals, prompting mills to lock in resources early.
The wide range between cumulative highest (19,370 yuan) and lowest (16,060 yuan) prices reflects significant divergence in value assessments. High-grade cotton is fiercely contested, while lower grades also find buyers, indicating a bifurcation in textile products: premium orders demand superior raw materials, while commodity products seek cost-effective options.
Transmission Effects on the Industry Chain
The steady full uptake of reserve cotton pressures ginners and traders' expectations ahead of the new harvest. If reserve sales continue at this pace, new cotton opening prices may face a ceiling. For downstream yarn mills, stable reserve supply helps smooth raw material cost fluctuations, especially when futures are volatile, providing a benchmark for spot purchases.
For buyers, as the price gap between reserve and imported cotton narrows, the risk-reward of aggressive bidding diminishes. Mills should differentiate rigid versus flexible demand and avoid overstocking during price stalemates. Monitoring new crop progress is essential; any delay in harvest could push reserve prices higher.