As the floor price for reserve cotton sales continues to decline, the procurement psychology of textile mills is undergoing subtle shifts. On August 29, the floor price for the 7th week (August 31-September 4) of central reserve cotton sales was set at 17,228 yuan per ton (equivalent to standard grade 3128B), marking a further decline from the previous week. This price level has already fallen below the expectations of some enterprises, intertwining "eager bidding" with "wait-and-see" sentiment across the industry. For cotton-consuming mills, this is not just a cost negotiation point but a critical moment to test their inventory management and capital scheduling capabilities.
Price Signals and Market Transmission
The price of 17,228 yuan per ton is not an isolated figure. It is calculated based on national department requirements, combined with cotton notarized inspection results and the quality differential table published by the China Cotton Association. This means that actual transaction prices for different batches will fluctuate around the floor price, with quality premiums and discounts becoming key factors in bidding. In recent weeks, the floor price has shown a slow downward trend, reflecting the policy intent to stabilize the market and ensure supply, while also hinting that the supply-demand balance is tilting in favor of buyers.
For textile mills, the continuous release of low-priced reserve cotton directly reduces raw material costs. For example, for 32-count pure cotton yarn, purchasing cotton at the current floor price could lower the raw material cost per ton of yarn by several hundred yuan compared to previous highs. This provides breathing room for weaving enterprises in the off-season, especially small and medium-sized factories with high inventory costs from earlier purchases, which can dilute overall costs by bidding for reserve cotton. However, the declining floor price also intensifies bearish expectations for future cotton prices, prompting some traders to reduce spot purchases and instead watch the reserve cotton transaction results.
Industrial Impact and Procurement Pace
The adjustment of the reserve cotton sales floor price is reshaping the procurement rhythm of upstream and downstream sectors. On one hand, textile mills are no longer eager to stockpile large quantities but instead bid flexibly based on order conditions, maintaining low inventory levels. On the other hand, cotton traders face greater sales pressure and must adjust their pricing strategies to compete with reserve cotton. This "short-cycle, small-batch" procurement model is becoming the industry mainstream.
Regionally, textile enterprises in major cotton-producing areas such as Xinjiang, Shandong, and Henan are responding more actively. These enterprises are larger in scale and have higher requirements for raw material stability, making the continuous supply of reserve cotton a reliable supplementary channel. In contrast, small and medium-sized mills in the interior are more focused on price fluctuations, tending to restock near the floor price. Notably, with the new cotton harvest approaching in September, expectations of increased supply are strengthening, which may further suppress cotton prices but also suggests that the current reserve cotton price may be near a potential bottom.