The reserve cotton auction on August 5 closed with a 100% transaction rate, and the average price reached 17,101.79 yuan per ton, up 200.63 yuan from the previous trading day. This increase is not an isolated event—since the current round of reserve sales began, cumulative listings and transactions have both reached 104,229.37 tons, with the transaction rate consistently at full capacity. When policy reserves become a price barometer, every bid by textile enterprises is a vote for the future market.
Signals from Auction Data
On that day, 8,006.552 tons were listed, all transacted, with the highest price at 19,370 yuan/ton and the lowest at 16,410 yuan/ton, a gap of nearly 3,000 yuan, indicating clear demand differentiation across cotton grades. Imported cotton averaged 17,262.05 yuan/ton, equivalent to 17,906.02 yuan/ton in 3128B terms, with an average premium of 1,740.02 yuan/ton; Xinjiang cotton averaged 16,723.21 yuan/ton, equivalent to 17,336.83 yuan/ton, with a premium of 1,170.83 yuan/ton. The premium for imported cotton exceeded that for Xinjiang cotton by nearly 570 yuan/ton, implying that mills are more willing to pay for the quality premium of imported cotton, possibly related to fiber length and strength requirements for high-count yarn orders.
Cumulative data further confirms this trend: as of August 5, imported cotton's cumulative average price was 17,370.97 yuan/ton with an average premium of 1,763.29 yuan/ton; Xinjiang cotton's cumulative average was 16,753.53 yuan/ton with a premium of 1,211.23 yuan/ton. Imported cotton maintains a premium advantage of about 600 yuan/ton, indicating that the market's reliance on imported cotton is not short-term. For procurement managers, this means that during the reserve sales period, the price gap between imported and Xinjiang cotton may remain high, requiring more precise trade-offs between quality and cost.
Price Uptrend and Restocking Logic
The average transaction price rose by 200.63 yuan/ton in a single day, with the 3128B-equivalent price rising to 17,736.72 yuan/ton, exceeding the recent daily fluctuation range. From an industrial logic perspective, the price increase reflects the concentrated release of restocking intentions among textile enterprises. Currently, we are in the traditional autumn/winter fabric preparation period, with downstream weaving mills maintaining high operating rates, providing support for rigid demand for cotton raw materials. Meanwhile, international cotton prices are moving stronger, raising the cost of imported cotton arrivals, which also drives some enterprises to turn to reserve cotton auctions.
Notably, the cumulative average transaction price of 17,184.09 yuan/ton, equivalent to 17,813.76 yuan/ton in 3128B terms, has risen from the first day, indicating a coexistence of reluctance to sell and a rush to buy. However, the premium has not gone out of control—the cumulative average premium of 1,596.20 yuan/ton is lower than extreme levels in some past years, showing that enterprises remain rational in bidding. This state of "both volume and price rising but premiums controlled" suggests that cotton prices have short-term support but have not yet entered an irrational surge.
Transmission and Expectations Across the Textile Chain
Reserve cotton auction prices have become an important reference anchor for the spot market. When auction averages rise consecutively, cotton traders and ginners are likely to follow suit with higher quotes, thereby pushing up yarn production costs. For spinning enterprises, raw material costs account for about 70% of total costs; every 100 yuan/ton increase in cotton prices raises the cost of 32-count pure cotton yarn by about 160 yuan/ton. If downstream fabric and garment orders cannot raise prices in tandem, profit margins will be further squeezed.
But from another perspective, the 100% transaction rate also reflects optimistic expectations about the future market. Textile enterprises are willing to bid at high prices, indicating that they have relatively sufficient orders on hand or anticipate further price increases. This self-reinforcing expectation may continue to support cotton prices in the coming weeks. However, it is necessary to be vigilant: if downstream consumer demand does not recover synchronously, high-cost raw materials will translate into inventory pressure, and the risk of price correction will accumulate.