The daily average price of China's reserve cotton auction fell below the 17,100 yuan/ton mark, down 286.21 yuan from the previous day, while the sell-through rate remained high at 96.76%. This divergence between volume and price suggests that textile mills have not stopped purchasing but are repositioning their price expectations—buyers are waiting for a more comfortable entry point, while sellers try to lock in profits amid strong transaction volumes.
Price Signal: Buyer Bargaining Under High Sell-Through
According to data from China Reserve Cotton Management Co., Ltd., the September 11 auction offered 8,003.286 tons, with 7,744.011 tons actually sold. The highest price reached 17,530 yuan/ton, and the lowest was 16,570 yuan/ton, a spread of nearly 1,000 yuan. This widening spread indicates that market acceptance is diverging across different grades and origins.
The average price of imported cotton was 17,077.89 yuan/ton, while Xinjiang cotton averaged 17,111.82 yuan/ton, a difference of only 34 yuan/ton. However, when converted to the 3128B benchmark, Xinjiang cotton reached 17,931.28 yuan/ton, 255 yuan higher than imported cotton. This structure shows that rigid demand for high-grade Xinjiang cotton remains firm, while lower-grade resources face greater bargaining pressure.
For downstream yarn mills, a modest decline in raw material costs does not immediately translate into improved profits. Cotton price drops are often accompanied by falling yarn prices, and actual processing margins depend on order flow and inventory turnover efficiency.
Cumulative Data and Industrial Transmission
As of September 11, cumulative offerings for the year reached 320,754.3527 tons, with cumulative sales of 320,495.0777 tons, a sell-through rate of 99.92%. The cumulative average price was 17,302.42 yuan/ton, or 17,949.92 yuan/ton on a 3128B basis, with an average premium of 1,276.25 yuan/ton.
The near-perfect cumulative sell-through rate indicates that the reserve cotton pricing mechanism has been accepted by buyers in the current market environment. However, it is worth noting that the cumulative average premium of 1,276.25 yuan/ton contrasts with the September 11 average premium of only 372.72 yuan/ton for imported cotton and 628.28 yuan/ton for Xinjiang cotton—both significantly below the cumulative average. The narrowing premium suggests that recent auction enthusiasm has cooled.
From a supply chain perspective, loosening cotton prices will gradually permeate into yarn and grey fabric segments. Purchasing managers in fabric distribution hubs such as Keqiao and Shengze typically observe raw material trends for one to two weeks before deciding on restocking intensity. If cotton prices continue to slide, yarn quotes may follow, affecting the competitiveness of fabric export pricing.
Regional Industrial Belt Reactions
The price spread between Xinjiang and imported cotton directly affects raw material choices in inland textile industrial belts. The higher 3128B-converted price of Xinjiang cotton means that mills producing combed yarn and high-count yarns with strict quality requirements will continue to prioritize Xinjiang resources. Meanwhile, mills producing low-count yarns and rotor-spun yarns may turn to imported or domestic cotton to control costs.
For industrial clusters such as Nantong home textiles and Shaoxing dyeing and printing, the impact of raw material price fluctuations is delayed. Home textile enterprises typically hold a certain amount of yarn inventory, so short-term cotton price declines will not immediately change procurement plans. However, if a downward trend is established, restocking momentum in late Q3 may slow as buyers await clearer directional signals.
Export-oriented enterprises need to monitor both exchange rate and cotton price fluctuations. RMB exchange rate movements can partially offset or amplify the impact of raw material cost changes on export quotes, and hedging strategies must be coordinated with procurement strategies.
Practical Recommendations
For Buyers - Monitor subsequent reserve cotton offerings and sell-through rates; if the rate continues to decline, prices may have further downside, so build positions in batches rather than replenishing all at once - Compare the 3128B-converted price spread between Xinjiang and imported cotton, and flexibly adjust procurement ratios based on quality requirements for specific yarn varieties - Align raw material procurement cycles with downstream order delivery schedules to avoid accumulating high-priced inventory during a downward price channel
For Export Enterprises - Leave room for cotton price fluctuations in quotations by using floating price clauses or shortening quote validity periods to reduce raw material risk - Monitor cotton futures and spot price spreads in key export markets to gauge changes in customer purchasing willingness - Leverage the current raw material price correction window to negotiate quarterly orders with long-term customers, trading volume for price
Overall, the coexistence of high reserve cotton sell-through rates and falling prices signals a market shifting from chasing rallies to rational procurement. Textile enterprises need to move from passive price-following to active management of raw material strategies, seeking certainty amid volatility.