On September 8, all 8,009.78 tonnes of reserve cotton on offer were sold, with an average price of 17,339.91 yuan/tonne, down 62.64 yuan from the previous session. The modest decline masks a deeper signal: with volumes still low, a 100% transaction rate no longer indicates panic buying but rather steady, demand-driven absorption. For textile mills, this means raw material cost support remains, but upward price momentum is fading.
Structural Shifts Beneath the Data
As of September 8, cumulative reserve cotton offered and sold both stood at 296,734.90 tonnes, with a 100% transaction rate maintained. The cumulative average price was 17,304.26 yuan/tonne, equivalent to 17,951.32 yuan/tonne on a 3128B basis, with an average premium of 1,328.04 yuan/tonne. This indicates that the market has consistently absorbed the supply without gaps, and the policy tone of securing supply and stabilizing prices has been effectively implemented.
However, structural divergence deserves attention. On that day, imported cotton sold at an average of 17,339.91 yuan/tonne (3128B: 17,939.98 yuan/tonne), with an average premium of 636.98 yuan/tonne. Cumulative data show imported cotton averaging 17,411.46 yuan/tonne (3128B: 18,064.14 yuan/tonne) and a premium of 1,391.20 yuan/tonne. In contrast, Xinjiang cotton averaged only 16,996.85 yuan/tonne (3128B: 17,627.77 yuan/tonne), with a premium of 1,146.90 yuan/tonne. The price gap between imported and Xinjiang cotton has widened to about 414 yuan/tonne, indicating a clear preference for higher-grade imported cotton.
This gap reflects upgrading pressure in product structures—export orders demand higher yarn quality, prompting mills to pay premiums for imported cotton. For Xinjiang cotton, this means its substitution advantage remains in medium-to-low count yarns, but it faces persistent squeeze in high-count yarn markets.
Price Volatility and Industry Chain Transmission
On that day, the highest transaction price was 18,320 yuan/tonne and the lowest 16,810 yuan/tonne, a spread of 1,510 yuan/tonne—far wider than usual. Such wide fluctuations are uncommon in reserve sales and often signal divergent bidding expectations. High-priced deals likely came from mills with urgent orders, while low-priced ones were made by traders or financially constrained small factories testing the waters.
The 3128B-equivalent price of 17,939.98 yuan/tonne is now within a hundred yuan of spot market levels, weakening the price-discovery function of reserve sales. For downstream weaving and garment makers, if cotton prices hover in the 17,300–17,400 yuan/tonne range, yarn quotes will gain short-term support, but weak end-order demand will limit the pass-through to fabric prices. In other words, profit distribution along the cotton textile chain is concentrating upstream, squeezing the bargaining power of mid- and downstream players.
Seasonally, September is the pre-peak stocking period, but this year's restocking pace is notably cautious. Some mills are buying hand-to-mouth rather than building large inventories. The fact that only about 8,000 tonnes were offered and yet some enterprises still bid a 636 yuan premium for imported cotton shows that demand is genuine, but expectations are not optimistic.
Outlook and Operational Strategies
Overall, the 100% transaction rate for reserve cotton is likely to persist, but the upside for average prices is limited. On one hand, the arrival of new cotton is approaching, easing supply expectations. On the other, downstream grey fabric inventories remain high, and weaving mill operating rates are recovering slowly, limiting their capacity to absorb high-priced cotton. In the short term, cotton prices are expected to fluctuate sideways. If external markets weaken or new cotton opening prices come in low, the average transaction price of reserve cotton could dip toward 17,000 yuan/tonne.