The final week of August in reserve cotton trading revealed a subtle signal: the turnover rate remained at 100%, but the average premium narrowed compared to earlier peaks. The weekly average price stood at 17,463 yuan per ton, translating to 18,172 yuan per ton on a 3128 standard basis, with an average premium of 1,184 yuan per ton. High turnover alongside moderate premiums indicates genuine restocking demand from textile mills, yet a cautious stance toward chasing higher prices.
Background
This round of reserve cotton sales began on July 20. By August 28, cumulative listed volume reached 240,683.76 tons, all sold, with a 100% turnover rate and an average price of 17,264 yuan per ton (3128 equivalent: 17,911 yuan per ton). The average premium stood at 1,434 yuan per ton. Weekly data shows the average price was 199 yuan higher than the cumulative average, indicating a slight upward shift in the short-term price center, but the premium decreased by 250 yuan from the cumulative level. This contrast suggests that while enthusiasm for bidding remains, companies are pricing more rationally amid tight supply.
By category, Xinjiang cotton averaged 17,413 yuan per ton, imported cotton 17,482 yuan, a gap of only 69 yuan; on a 3128 basis, they were 18,039 and 18,220 yuan, respectively, a gap of 181 yuan. Imported cotton retains a quality premium, but the bidding premiums of 1,051 and 1,232 yuan respectively show stronger competition for imported grades, reflecting rigid demand for higher-quality fiber.
Industry Impact
Geographically, Shandong, Hubei, and Jiangsu accounted for 2.1 million tons, or 52.34% of the weekly total. These provinces are textile powerhouses with concentrated yarn and fabric capacity. Their concentrated purchases confirm relatively full order books and strong restocking momentum. In contrast, other provinces saw scattered transactions, indicating uneven demand recovery, with many regions still purchasing on a need-only basis.
The high turnover rate supports the spot cotton market, but narrowing premiums suggest limited upside. For ginners, the weekly average price serves as a reference for new crop pricing. If weekly averages remain above 17,000 yuan per ton, opening prices for new cotton may find support; conversely, if premiums continue to weaken, market sentiment could cool. For downstream mills, purchasing reserve cotton at current levels offers cost-effectiveness, but they must guard against inventory buildup after concentrated restocking.
Notably, a 100% cumulative turnover rate means every ton offered was absorbed, reflecting a supply gap and the precision of policy regulation. If weekly offerings continue at around 40,000 tons, the market may maintain a tight balance, with price fluctuations likely to moderate.