On July 28, reserve cotton auctions once again achieved full clearance, with all 8,006 tons sold. The average price was 17,187 yuan/ton, down 88 yuan from the previous day. Cumulative sales have surpassed 56,138 tons, with a 100% clearance rate maintained.
Imported Cotton Premium Widens
Imported cotton averaged 17,384 yuan/ton, with a premium of 1,795 yuan over the 3128B benchmark. Xinjiang cotton averaged 16,725 yuan/ton, with a premium of 1,220 yuan. The premium gap widened to 575 yuan/ton, indicating fiercer competition for imported grades.
This premium reflects strong demand for high-quality, consistent cotton from downstream mills. Domestic stocks remain tight, while imported cotton often meets the specifications for high-count yarn production. This directly fuels bidding intensity.
Narrow Price Moves, Structural Imbalance Persists
Although the average price edged down, it remains within a high range for the year. The spread between the highest bid (17,980 yuan) and lowest (16,480 yuan) was 1,500 yuan, highlighting differentiated pricing by grade and origin.
This divergence means buyers cannot rely solely on average prices. Scarcity of premium cotton is being amplified by market pricing, while lower-grade cotton faces liquidity constraints. For mills focused on medium-to-low count yarns, current auction prices remain attractive, but those pursuing high-count, high-density products face mounting premium pressure.
Supply Chain Implications
Sustained full clearance eases some raw material gaps but does not reverse the tight supply outlook. High imported cotton premiums will feed into yarn costs, especially for mills relying on imported fiber, strengthening cost support.
Meanwhile, the price structure between Xinjiang and imported cotton is forcing ginners and traders to reassess inventory strategies. If the premium persists, domestic cotton's cost disadvantage may push more firms toward futures-linked procurement or locking in foreign supplies.