On August 7, the reserve cotton auction delivered a perfect result: all 8,018 tons listed were sold, with an average price of 17,136 yuan per ton, up 66 yuan from the previous trading day. This price level has held above the 17,000 yuan mark for several consecutive sessions, and the price gap between imported and Xinjiang cotton is worth noting—imported cotton averaged nearly 478 yuan per ton higher than Xinjiang cotton, and the gap widened to about 600 yuan when converted to the 3128B standard.
Background
Since the start of this round of reserve cotton sales, cumulative sales have reached 120,000 tons, with a 100% transaction rate and no failed auctions. As of August 7, the cumulative average price was 17,173 yuan per ton, equivalent to 17,801 yuan per ton on a 3128B basis, with an average premium of 1,590 yuan per ton. Imported cotton saw an average premium of 1,761 yuan, while Xinjiang cotton had a premium of 1,208 yuan, indicating stronger bidding enthusiasm for imported cotton.
This scene of full transactions and high premiums is not accidental. From an industry perspective, we are currently in the pre-season stocking window before the traditional peak season. Yarn orders have improved, and enterprises need to lock in lower-cost raw materials. Reserve cotton offers better value than comparable spot grades, naturally becoming a bidding hotspot. The widening premium for imported cotton suggests a more urgent demand for high-grade foreign cotton, possibly reflecting product structure shifts toward high-count yarns or quality requirements for export orders.
Industry Impact
The slight rise in average transaction prices means downstream textile mills are still facing accumulating raw material cost pressure. At the current equivalent price of 17,800 yuan per ton, the raw material cost for 32-count pure cotton yarn has exceeded the breakeven point for many enterprises. If cotton prices remain high, the pressure to raise yarn prices will pass on to fabric and apparel segments, ultimately potentially dampening end-user purchasing intentions.
On the other hand, the 100% transaction rate sends a positive signal: mills' restocking willingness has not retreated despite high prices, instead showing a pattern of buying more as prices rise. This is supported by orders—according to industry feedback, some weaving enterprises have seen operating rates recover to above 70%, and gray fabric inventories have been digested. However, it is important to note that current high transaction volumes may have borrowed from future demand. If later orders fail to connect smoothly, enterprises will face the risk of devaluation of high-priced inventories.
From a regional perspective, the widening gap between Xinjiang and imported cotton may prompt some inland mills to adjust their cotton mix. Enterprises that originally relied mainly on Xinjiang cotton may increase the proportion of imported cotton to balance cost and quality. This will have a certain impact on Xinjiang cotton sales rhythm and logistics scheduling, while port inventory and arrival schedules of imported cotton also need close attention.