Reserve cotton auctions continue to send strong signals. On July 22, all 8,013 tons offered were sold, with an average price of 17,421 yuan/ton. Although down 59 yuan from the previous session, the 100% sell-through rate over consecutive days tells a clear story—textile mills are not waiting; they are scrambling for supply.
More telling is the structural divergence. Imported cotton fetched an average of 17,552 yuan with a premium of 1,807 yuan, while Xinjiang cotton averaged 17,035 yuan with a premium of 1,510 yuan. The price gap of 517 yuan at the raw material level, narrowing to 297 yuan after adjustment to grade 3128B, underscores the stronger premium power of imported cotton. This is not random—it reflects mills' rigid quality screening for cotton fiber.
Market Divergence and Premium Logic
The premium level is a barometer of market sentiment. The 1,807 yuan premium for imported cotton, far exceeding Xinjiang cotton's 1,510 yuan, indicates that mills are leaning toward high-grade imported cotton for mid-to-high-end yarn production. Two forces drive this: rising quality requirements from export orders, and tightening domestic stock of high-grade cotton.
The spread between the highest bid of 19,000 yuan and the lowest of 16,720 yuan—a nearly 2,300 yuan gap within the same session—is uncommon in previous years. Mills are no longer pricing purely on cost; they are factoring in what the downstream market can bear for yarn prices.
Industrial Transmission and Inventory Dynamics
Behind the 100% sell-through rate lies a collective shift in inventory strategy. Over the past three months, yarn prices remained under pressure, prompting mills to adopt a just-in-time, low-inventory approach. But by late July, the tide is turning: grey fabric turnover has accelerated, some weaving mills have slightly raised operating rates, triggering replenishment demand for cotton yarn.
As the price anchor for the market, the heat of reserve cotton auctions directly reflects liquidity in the supply chain. When mills are willing to pay 1,800 yuan above the market price for imported cotton, it signals a clear expectation of future orders. This expectation is not baseless—it stems from earlier order placements by end-brand apparel companies.
Impact on Procurement and Production
With reserve cotton auctions now in a high-frequency, high-sell-through phase, the window for mills to lock in raw materials is narrowing. For those still unhedged, each upcoming auction will bring fiercer competition.