Full Turnover in Reserve Cotton Sales: What Signals Does the Price Rise Send?

On August 28, reserve cotton sales once again achieved a perfect turnover: all 8,036.947 tons listed were sold, with an average price of 17,588.27 yuan/ton, up 154.8 yuan from the previous session, and the 3128B-equivalent price rose to 18,319.46 yuan/ton. This marks another consecutive day of 100% turnover since the release began, reflecting not only urgent restocking demand but also cautious market expectations about future supply.

Event Background

Cumulative data through August 28 show that total listed and traded volume reached 240,683.755 tons, with an average price of 17,263.96 yuan/ton (3128B-equivalent: 17,911.18 yuan/ton). Notably, the gap between the highest cumulative price (19,370 yuan/ton) and the lowest (16,060 yuan/ton) exceeds 3,300 yuan, indicating significant quality variation across batches and rising sensitivity to quality parameters in bidding.

On the day, imported cotton averaged 17,606.96 yuan/ton (3128B: 18,398.72 yuan/ton) with an average premium of 1,410.72 yuan, while Xinjiang cotton averaged 17,525.18 yuan/ton (3128B: 18,051.88 yuan/ton) with a premium of 1,063.88 yuan. The price spread between imported and Xinjiang cotton widened to nearly 350 yuan from about 200 yuan a day earlier, yet the premium narrowed, suggesting that while imported cotton retains an absolute price advantage, buyers are more restrained in chasing higher prices.

Industry Impact

The sustained 100% turnover indicates low raw material inventories among textile mills and concentrated restocking demand. However, the average price rise of 154.8 yuan/ton signals accumulating cost pressure for downstream weaving and apparel sectors. If cotton prices continue to strengthen, yarn quotes will likely follow, but terminal order acceptance remains uncertain.

From a product mix perspective, imported cotton premiums exceed those for Xinjiang cotton, reflecting persistent preference despite the price gap, possibly due to specific fiber length or strength requirements in certain orders. Meanwhile, rising Xinjiang cotton prices underscore the scarcity of high-quality domestic fiber, supporting future pricing for the Xinjiang production area.

For buyers, the reserve cotton price anchor is significant: the average price of 17,588 yuan/ton has become a key reference for the spot market. Once the reserve release winds down, pricing power may shift back to ginners and traders, potentially widening price volatility. Therefore, trading data over the next two weeks will directly influence price expectations before new cotton arrives in October.

Practical Recommendations

For Buyers - Monitor the daily gap between the average price and the 3128B-equivalent; a widening gap suggests rising quality premiums, prompting grade adjustments. - When the spread between imported and Xinjiang cotton exceeds 300 yuan/ton, prioritize imported cotton, but confirm logistics and quota costs. - Set maximum premium thresholds to avoid overbidding, especially for non-urgent batches.

For Foreign Trade Companies - When locking forward orders, use the cumulative average price of 17,263 yuan/ton as a cost baseline, leaving a buffer of 300-500 yuan/ton. - If clients specify Xinjiang cotton, communicate quality premiums with suppliers in advance to prevent unexpected cost deviations. - Monitor policy signals before new cotton arrives; if reserve releases increase, consider delaying some purchases to lower raw material costs.