16,662.82 yuan per tonne. That was the average price at which China's state cotton reserve sold on September 24, 2026. Yet the cumulative average price since the auction programme began stands at 17,186 yuan per tonne. The 525 yuan gap between these two figures deserves more attention from textile enterprises than the headline 100% sell-through rate itself.
Deal Structure: Full Sell-Through Does Not Equal Broad Shortage
China National Cotton Reserve Management Co. offered 8,005.6110 tonnes for sale on the day, and all of it was sold. The highest transaction price reached 17,420 yuan per tonne, while the lowest was 16,420 yuan, a spread of exactly 1,000 yuan. This spread indicates that participating enterprises held divergent views on cotton quality and transportation costs. Not every buyer was willing to chase prices higher.
More telling is the converted 3128B price. The daily transaction converted to 3128B stood at 17,448.82 yuan per tonne, with an average premium of 855.82 yuan. A premium below 1,000 yuan suggests bidding intensity was moderate. Enterprises bid relatively conservatively. If the market were genuinely short of cotton, premiums would typically far exceed this level.
Looking at cumulative data, as of September 24, total offered volume reached 401,691.7451 tonnes, with cumulative sales of 398,584.7791 tonnes, a sell-through rate of 99.23%. The cumulative average price was 17,186 yuan per tonne, equivalent to 17,845.04 yuan for grade 3128B, with an average premium of 1,147.35 yuan. The cumulative high was 19,370 yuan and the low was 16,010 yuan, a range exceeding 3,300 yuan.
Why is the daily average notably below the cumulative average? This points to one conclusion: since the reserve rotation began, the centre of gravity for cotton prices has been shifting downward. Enterprises that bid early locked in higher costs, while those participating recently have benefited from a lower price window. For mills that have not yet restocked, this trend warrants close attention.
Variety Divergence: Price Gap Signals Between Imported and Xinjiang Cotton
In cumulative data, imported cotton averaged 17,231.17 yuan per tonne, equivalent to 17,896.80 yuan for 3128B, with an average premium of 1,147.80 yuan. Xinjiang cotton averaged 16,997.17 yuan, equivalent to 17,628.62 yuan for 3128B, with an average premium of 1,145.45 yuan.
The cumulative price gap between imported and Xinjiang cotton is 234 yuan per tonne. This gap is not large, but its persistence indicates that textile enterprises maintain rigid demand for imported cotton in their blending formulas. Mills producing medium-to-high count yarns in particular have specific requirements for staple length, micronaire, and consistency, and this demand will not disappear simply because the price gap narrows.
For buyers, the 234 yuan gap means there is room to optimise blending formulas. If orders do not demand extreme yarn quality, increasing the Xinjiang cotton proportion can reduce raw material costs. However, it is worth noting that batch-to-batch consistency of Xinjiang cotton may not match imported cotton in certain indicators, and blending adjustments require corresponding fine-tuning of process parameters.
From a regional perspective, export-oriented enterprises along the Jiangsu-Zhejiang coast tend to favour imported cotton to meet overseas customers' traceability requirements. Inland textile clusters, particularly those in Henan and Shandong, are more receptive to Xinjiang cotton. This regional divergence directly affects the raw material cost structure of different industrial belts.
Industrial Transmission: From Auction to Yarn Pricing
The gap between the cumulative 3128B equivalent price of 17,845.04 yuan and the daily 3128B equivalent of 17,448.82 yuan is roughly 400 yuan per tonne. This gap gets amplified when transmitted to the yarn stage.
Based on current spinning cost structures, cotton accounts for approximately 65% to 70% of pure cotton yarn production costs. A 400 yuan per tonne fluctuation in raw cotton prices translates to a yarn cost change of roughly 260 to 280 yuan per tonne. For a medium-sized spinning mill producing 500 tonnes per month, this means monthly raw material cost fluctuations of 130,000 to 140,000 yuan.
This figure is not trivial for spinning operations already running on thin margins. Particularly when downstream garment orders currently hold strong bargaining power, spinning mills find it difficult to fully pass cost fluctuations on to weaving and garment segments.
For weaving enterprises, yarn procurement rhythm needs to be more flexible. If the judgment is that cotton prices still have downward room in the short term, a small-batch, multi-frequency procurement strategy can be adopted to avoid locking in high-priced raw materials all at once. However, it is also necessary to guard against rebound risks from tightened market supply after the reserve rotation ends.
From an export perspective, the combined effect of RMB exchange rate fluctuations and cotton price trends deserves attention. If cotton prices decline while the exchange rate remains relatively stable, the quotation competitiveness of export-oriented textile enterprises will strengthen somewhat. However, overseas customers typically demand a share of the benefits from lower raw material costs, so actual profit improvement may be limited.