Reserve Cotton Sales Continue Full Turnout, High Premiums Reveal Urgent Restocking by Spinners

Reserve cotton sales entered their ninth trading day with the turnover rate still locked at 100%, leaving no room for negotiation in the market. On September 9, all 8,006.76 tons on offer were sold at an average price of 17,387.67 yuan/ton, up 47.76 yuan from the previous day, with the price converted to Grade 3128B reaching 18,091.22 yuan/ton. This price signal indicates that spinners' reliance on reserve cotton has not weakened as the sales progress, but rather intensified under rigid restocking demand.

Data Insights

The day's highest transaction price was 18,330 yuan/ton and the lowest 16,990 yuan/ton, a spread of 1,340 yuan, reflecting clear differentiation among cotton grades in bidding. Imported cotton sold at an average price equal to the overall average, with a converted 3128B price of 18,091.22 yuan/ton and an average premium of 788.22 yuan/ton—narrower than the cumulative average premium of 1,313.86 yuan/ton, yet still at a high level.

As of September 9, cumulative reserve cotton listings reached 304,741.66 tons, all sold with zero failed auctions. The cumulative average price was 17,306.46 yuan/ton, converting to 17,954.99 yuan/ton for Grade 3128B; the highest price was 19,370 yuan/ton in earlier sessions, and the lowest 16,060 yuan/ton, with a range exceeding 3,300 yuan. By category, imported cotton averaged 17,410.63 yuan/ton cumulatively, while Xinjiang cotton averaged 16,996.85 yuan/ton, a spread of about 414 yuan. Imported cotton also commanded a higher premium of 1,370.03 yuan/ton versus 1,146.90 yuan/ton for Xinjiang cotton, reflecting spinners' stronger preference for imported quality.

Supply-Demand Dynamics and Price Transmission

The 100% turnover rate underscores low raw material inventories among spinners. Currently on the eve of the traditional 'golden September and silver October' peak season, downstream yarn orders are picking up, but high-grade cotton resources in the spot market remain tight, making reserve cotton the most direct channel to replenish stocks. High premiums indicate that spinners are willing to pay extra to lock in volume and quality—a mindset that supports cotton prices in the short term.

However, one must be wary that sustained full-turnover sales accumulate potential supply pressure for later periods. Once the sales conclude or downstream orders fall short of expectations, the inventories built up through aggressive buying could translate into market selling pressure. For spinners, the current decision to restock at high prices is essentially a race against time—betting that peak-season demand will absorb costs in time.

The price structure, with the spread and premium difference between imported and Xinjiang cotton, suggests that spinners value consistency and spinnability more in their raw material choices. The stability of imported cotton in terms of length and strength allows it to fetch higher premiums in bidding, indirectly strengthening imported cotton prices.

Practical Recommendations

For Purchasers - Monitor daily reserve cotton listing volumes and average price changes; if premiums continue to narrow, consider slowing bidding pace to avoid chasing highs. - Prioritize bidding for imported cotton to stabilize quality based on your yarn product needs, but carefully assess the cost premium against downstream price transmission space. - Diversify procurement channels rather than over-relying on reserve cotton; consider Xinjiang cotton spot or forward contracts for imported cotton as supplements.

For Foreign Trade Companies - Fluctuations in the RMB exchange rate affect the actual cost of imported cotton; consider locking in forward rates or using RMB-denominated contracts to mitigate currency risk. - Pay attention to reserve cotton sales policy; if listing volumes increase later, foreign cotton prices may face pressure, allowing you to adjust procurement timing accordingly. - Factor in raw material price volatility when quoting export orders to avoid squeezing profit margins if cotton prices rise.