On August 3, reserve cotton auctions once again closed with a 100% clearance rate, marking the 11th consecutive full-clearance trading day. All 8,014.638 tons offered were sold, with an average price of 16,862 yuan/ton, down 96 yuan from the previous day, equivalent to 17,553 yuan/ton for grade 3128. Behind this seemingly routine daily data lies the textile industry's sensitive response to cotton supply. With the narrowing price gap between domestic and international cotton and no clear recovery in downstream orders, the sustained full clearance in the auction market underscores the rigid demand of mills for stable supply sources.
Structural Divergence: Imported Cotton Premium Highlights High-Grade Demand
Notably, performance varied significantly by origin. Xinjiang cotton averaged 16,583 yuan/ton (equivalent to 17,280 yuan/ton for grade 3128), with an average premium of 1,114 yuan/ton. Imported cotton averaged 17,089 yuan/ton (17,775 yuan/ton for grade 3128), with an average premium of 1,609 yuan/ton. The premium of imported over Xinjiang cotton exceeded 500 yuan/ton, and the bid premium was nearly 500 yuan higher—a structural divergence that is not accidental.
The strong bidding for imported cotton indicates intensifying competition among mills producing high-count yarns and high-value-added fabrics for premium resources such as long-staple and US cotton. Although Xinjiang cotton dominates in output, its fiber properties still cannot fully replace imported cotton in certain high-end spinning scenarios. For buyers, this price signal suggests that if product positioning is high-end, imported cotton resources should be locked in early to avoid further cost escalation.
Cumulative Sales and Price Trends: Supply-Demand Game Enters a Critical Phase
Since the launch of reserve cotton sales on July 20, cumulative sales reached 88,208.582 tons by August 3, with the clearance rate consistently at 100%. This indicates that despite policy-driven supply supplements, textile enterprises have not reduced purchases due to high prices; instead, they show a 'bid-and-win' attitude. On one hand, there is a supply gap before the new crop arrives, and old-crop inventories are low. On the other hand, concerns about weather disruptions and logistics uncertainties prompt mills to build safety stocks ahead of time.
In terms of price trends, the average price fell 96 yuan/ton from the previous day, but the decline in the grade-3128 equivalent narrowed to 48 yuan/ton, indicating strong support for high-grade cotton. Overall, cotton prices are consolidating at high levels rather than trending down unilaterally. This 'steady volume and price' pattern means that downstream yarn mills face unabated cost pressure in the short term—yarn prices lag behind, spinning margins are squeezed further, and some small and medium enterprises may face losses on orders.
Transmission to Industrial Clusters: From Auction Premiums to Regional Quotations
Reserve cotton auctions are not only a market regulation tool but also a pricing anchor for the industry. For example, Xinjiang cotton auction prices directly affect local spot quotes, which in turn transmit to yarn cost calculations in textile clusters such as Shandong, Henan, and Jiangsu. Currently, premiums for Xinjiang cotton are relatively moderate, but high premiums for imported cotton may push up external spot prices, widening the domestic-international price gap and challenging the competitiveness of export-oriented mills.
For fabric clusters like Keqiao and Shengze, fluctuations in cotton costs ultimately reflect in grey fabric and finished fabric quotations. If cotton prices remain high, downstream weaving mills may adjust product mixes, increasing the proportion of chemical fiber blends to hedge against cost pressures. This trend is already visible in recent fabric inquiries—pure cotton inquiries have become less active, while interest in polyester-cotton and viscose blends has risen.