When the weekly transaction rate stays at 100% for six consecutive weeks, the market no longer doubts the appeal of reserve cotton. From August 24 to 28, the average transaction price was 17,463 yuan/ton, with a premium of 1,184 yuan/ton over the base price. This data reflects textile mills' strong willingness to replenish inventory. But looking at the longer trend—cumulative sales of 240,683 tons since July 20, all sold—suggests a deeper supply-demand imbalance is brewing.
Signals Behind the Transaction Data
This week, 40,100 tons of reserve cotton were offered, and all were sold. Xinjiang cotton averaged 17,413 yuan/ton, while imported cotton averaged 17,482 yuan/ton, a narrow gap of 69 yuan/ton. This convergence is not accidental: the premium for imported cotton was 1,232 yuan/ton, higher than Xinjiang cotton's 1,051 yuan/ton, indicating fiercer competition for imported lots. In terms of the 3128-equivalent price, imported cotton (18,220 yuan/ton) exceeded Xinjiang cotton (18,039 yuan/ton) by 181 yuan/ton, yet mills still pay the premium because imported cotton offers better stability in length and strength, suitable for high-count yarn production.
From the perspective of buyer distribution, Shandong, Hubei, and Jiangsu together accounted for 21,000 tons, or 52.34% of the weekly total. This regional concentration is typical: Shandong and Jiangsu are major cotton textile provinces with large capacity and rigid demand; Hubei, as a rising spinning base, has seen rapid capacity expansion, making reserve cotton a key channel for low-cost raw materials. The fact that these three provinces account for over half implies that inland mills' reliance on reserve cotton is still climbing, while Xinjiang-based enterprises participate less actively.
Price and Premium Dynamics
The weekly average price of 17,463 yuan/ton is 199 yuan/ton higher than the cumulative average of 17,264 yuan/ton since July 20, but the premium has narrowed from 1,434 yuan/ton to 1,184 yuan/ton. This decline seems contradictory but actually reflects market psychology: early panic buying drove premiums up, but as supply continues, sentiment has rationalized. However, the 3128-equivalent price rose from 17,911 to 18,172 yuan/ton, indicating higher quality in recent transactions.
For buyers, the narrowing premium suggests less intense bidding, but the 100% transaction rate still points to an unmet supply gap. Currently, the domestic-import price spread remains wide, making reserve cotton the most cost-effective option. Yet this advantage is being eroded—as the new cotton season approaches, the pace and pricing of reserve sales will become key variables shaping market expectations.
Industry Chain Transmission and Outlook
The high transaction rate directly benefits upstream ginners and traders, who secure low-cost raw materials and lock in processing margins. Downstream weaving and garment enterprises, however, face cost pressures: cotton yarn prices lag, fabric orders are weak, and profit margins are squeezed from both ends. This structural contradiction means the 'low-price dividend' of reserve cotton is largely captured by intermediate links, while terminal consumption remains sluggish.
From a temporal perspective, over the 40 days from July 20 to August 28, cumulative sales reached 240,683 tons, averaging about 6,000 tons per day, yet the transaction rate stayed at 100%. This suggests extremely strong restocking intentions, possibly driven by concerns over new cotton delays or quality uncertainty, or expectations of future price increases. However, as new cotton begins to hit the market in September, the appeal of reserve cotton may wane, and whether the transaction rate can stay high will test real market demand.