Reserve cotton selling price has dropped for two consecutive sessions, prompting spinners to reassess their stocking strategy.
On Aug 13, 8,009.335 tons of reserve cotton were offered and fully sold, maintaining a 100% turnover rate. However, the average price fell to 17,172.51 yuan/ton, down 110.67 yuan from the previous day, with the 3128B equivalent at 17,889.05 yuan/ton. This marks the second notable pullback in the current sales round, widening disagreement over price direction.
Price Transmission and Sales Structure
Looking at the day's breakdown, imported cotton averaged 17,259.90 yuan/ton (3128B: 18,040.76 yuan/ton) with an average premium of 1,560.76 yuan/ton; Xinjiang cotton averaged 17,017.59 yuan/ton (3128B: 17,620.09 yuan/ton) with a premium of 1,140.09 yuan/ton. The premium gap between imported and Xinjiang cotton narrowed to about 420 yuan/ton, suggesting that the cost advantage of imported cotton is being absorbed by price.
Cumulatively, through Aug 13, total offered volume reached 152,310.644 tons, all sold, with an average price of 17,177.03 yuan/ton (3128B: 17,806.43 yuan/ton). The highest transaction was 19,370 yuan/ton in the early phase, the lowest 16,060 yuan/ton, and the average premium was 1,539.07 yuan/ton. Although the sales round is more than half done, turnover remains strong, but the price center has gradually shifted lower.
Industry Impact and Procurement Logic
The price decline offers marginal relief for textile mills' raw material costs. More importantly, it raises the question of whether this correction signals a trend reversal. The 100% turnover indicates that downstream demand remains firm, but the willingness to pay premiums has weakened, implying that mills are no longer chasing high prices and are waiting for better levels.
For spinners, at the current 3128B equivalent of 17,889 yuan/ton, if the gap with spot prices narrows, the appeal of reserve cotton diminishes, and mills may turn to spot purchases or delay restocking. Conversely, if prices continue to fall, a wave of concentrated restocking could be triggered. Therefore, the price trend in the coming week will be a key indicator for short-term cotton price direction.