On August 31, all 8,001.663 tons of reserve cotton listed by China National Cotton Reserves Corporation were sold, maintaining a 100% turnover rate for consecutive sessions, with an average price of 17,568.87 yuan/ton, down only 19.40 yuan from August 28. This near-flat price movement conceals a paradox: spinners' hunger for raw material and their caution about the future, intertwined in the same transaction.
Turnover and Price: Firm Demand, Yet Fragile Confidence
The highest price of the day was 18,150 yuan/ton and the lowest 17,090 yuan/ton, a spread of 1,060 yuan, narrower than in previous sessions. The 3128B-equivalent price stood at 18,214.34 yuan/ton, leaving little gap with the spot market. This suggests the cost advantage of reserve cotton is fading, yet the full turnover indicates that production demand is still propping up the market.
Cumulative data offers a clearer picture: as of August 31, cumulative listed reserve cotton reached 248,685.418 tons, all sold, with an average price of 17,273.77 yuan/ton (3128B: 17,920.93 yuan/ton). The near-total dependence of spinners on reserve cotton is evident—they accept almost everything offered.
Imported vs. Xinjiang Cotton: Quality Premium Behind the Price Gap
On the day, imported cotton averaged 17,556.01 yuan/ton with an average premium of 970.89 yuan; Xinjiang cotton averaged 17,653.30 yuan with a premium of 1,087.75 yuan. The higher price and premium for Xinjiang cotton indicate spinners are willing to pay extra for its stability.
Cumulatively, imported cotton averaged 17,399.18 yuan/ton (premium 1,538.71 yuan), while Xinjiang cotton averaged 16,987.19 yuan (premium 1,146.52 yuan). The larger premium for imported cotton reflects a growing reliance on imports, possibly influenced by international price trends, exchange rates, and trade policies. These structural differences directly inform procurement decisions.
Policy Signals and Industry Transmission
The pace and pricing of reserve cotton sales are a barometer for the cotton textile market. The current 100% turnover suggests low inventories and strong restocking demand. Yet the narrow price movement implies limited confidence in a rally—if buyers expected prices to rise, premiums would be higher.
For upstream ginners, reserve cotton prices serve as a benchmark for seed cotton procurement. The current average level suggests limited upside for seed cotton prices before the new crop arrives. For midstream spinners, the steady supply of reserve cotton acts as an insurance policy on production costs, but the policy's duration remains uncertain.