On August 4, all 8,014 tons of reserve cotton offered for sale were transacted, with an average price of 16,901 yuan/ton, up 39 yuan from the previous day. This marks another day of 100% turnover in the current sales program. From July 20 to August 4, cumulative sales reached 96,000 tons with zero failed auctions. On the surface, spinners show strong restocking willingness, but a closer look reveals market divergence: Xinjiang cotton prices dropped 46 yuan while imported cotton rose 47 yuan, widening the price gap to nearly 600 yuan/ton, with the premium difference reaching about 600 yuan.
Market Background
The reserve cotton sales program started on July 20, offering Xinjiang and imported cotton. As of August 4, the 3128-equivalent price for Xinjiang cotton was 17,224 yuan/ton, while imported cotton was 17,809 yuan/ton, a premium of 585 yuan for imports. Notably, the average premium for imported cotton reached 1,643 yuan/ton, far exceeding Xinjiang's 1,058 yuan, indicating fierce competition for imported lots.
This divergence is not accidental. Imported cotton typically offers more stable fiber length and strength, suitable for high-count yarn and premium fabrics. Downstream orders now feature small volumes and high specifications, increasing spinners' sensitivity to raw material consistency. The widening premium suggests some mills are willing to pay more for stability, reshaping traditional bidding dynamics.
Industry Impact
High turnover and premium divergence send multiple signals along the supply chain. For upstream ginners, stable reserve prices, especially firm imported cotton, provide support for domestic cotton prices. However, the slight decline in Xinjiang cotton prices may reflect a shift toward imported cotton, urging Xinjiang to adjust in quality and pricing.
For spinners, consecutive full turnover indicates real restocking demand, but the premium structure calls for refined procurement strategies. The expanding imported premium raises costs for mills using imports; if the yuan depreciates or international prices rise, cost pressure will intensify. Meanwhile, the pace and volume of reserve releases directly affect supply expectations; enterprises should monitor announcements to avoid bidding spikes.
Price trends show the 3128-equivalent price at 17,580 yuan/ton, up 27 yuan, with a slight upward bias. However, the widening gap between Xinjiang and imported cotton may prompt some orders to shift to blends or synthetic fibers, especially when pure cotton yarn margins are thin, curbing price gains.