On September 8, reserve cotton auctions again concluded with a 100% transaction rate, as all 8,009.78 tons offered were sold, at an average price of 17,339.91 yuan per ton, down 62.64 yuan from the previous session. Behind the seemingly routine daily data lies a delicate supply-demand tug-of-war in the textile raw material market: mills remain firm in restocking but increasingly price-sensitive.
Market Context
Since the current round of reserve cotton releases began, cumulative listings and transactions have both reached 296,734.90 tons, with the transaction rate consistently at a full 100%. The cumulative average price stands at 17,304.26 yuan per ton, equivalent to 17,951.32 yuan per ton on a 3128B basis; the highest transaction price touched 19,370 yuan, while the lowest fell to 16,060 yuan, a range of more than 3,300 yuan, indicating divergent assessments of quality and value among bidders.
A clear segmentation has emerged between imported and Xinjiang cotton. On the day, imported cotton averaged 17,339.91 yuan per ton, and cumulatively 17,411.46 yuan, with 3128B-equivalent prices of 17,939.98 and 18,064.14 yuan respectively. Xinjiang cotton, by contrast, has a cumulative average of only 16,996.85 yuan, or 17,627.77 yuan on the 3128B basis. The spread after standardization reaches about 437 yuan, and imported cotton's cumulative average premium of 1,391.20 yuan exceeds Xinjiang's 1,146.90 yuan by 244 yuan, underscoring the market's preference for the quality consistency of imported lots.
Industry Implications
A 100% transaction rate is not new, but the sustained full subscription reflects the reality of low mill inventories and a narrowing window for essential restocking. September typically marks the prelude to the traditional peak season; recovering order expectations prompt mills to secure raw materials early, and reserve cotton, as a relatively cost-effective and reliable source, naturally becomes a priority. However, the dip in average prices from the prior session, coupled with a widening gap between high and low bids, suggests that some enterprises are bidding more rationally, avoiding blind price chasing.
The premium divergence between imported and Xinjiang cotton offers direct reference for procurement decisions. The higher premium for imported cotton indicates that, amid a shortage of high-grade fiber, mills are willing to pay extra to ensure quality for high-count yarns. The lower prices for Xinjiang cotton may be linked to expectations of the upcoming new crop and mills waiting for spot market replenishment. This structural difference implies that imported cotton prices may show greater resilience than Xinjiang cotton in the near term, and the domestic-import spread could remain wide.
For upstream ginners and traders, the sustained full subscription eases temporary supply pressure but also caps potential spot price gains. Downstream weaving and garment enterprises should watch for cost pass-through: if cotton prices stay elevated, gray fabric quotes are more likely to follow, squeezing profit margins on export orders.