DIVERSITY has helped promote Australian lamb and now the diverse nature of the nation’s wool clip is becoming an important market factor as demand increases.
As wool prices pushed further into record territory this week, levy-funded body Australian Wool Innovation said the hugely variable wool types and descriptions Australia produces is obviously a key factor in price determination.
“Everything from 14-24 microns can be found in commercial quantity in the Merino sector with extremely varying amounts of vegetable matter, staple strength ranging from 15-50nkt and length ranges of 55-120mm, largely as a growing number of wool growers have chosen to change to 6 or 8 month shearing patterns.
“Many buyers now comment that they are finding it increasingly difficult to build full container loads of the same type within a sale week out of the same centre, making it too unpredictable to sell too far forward in fear of being unable to fulfil the contracted delivery point.”
Increased offering not an obstacle
AWEX senior market analyst Lionel Plunkett said an increased national offering of 45,999 bales, 5373 more than last week, could not halt the markets continued climb into unexplored territory.
The benchmark Eastern Market Indicator rose 22 cents this week to eventually close at 1522c/kg clean, another record high, he said. In US dollar terms, the EMI fell 3 cents to US1145c/kg with Australian dollar 2pc weaker against the US dollar, down US1.32 cents to 75.24 cents. Brokers passed in 5pc of the offering.
“As with recent sales, micron was the focus and it was 19.5 micron and finer which posted the most significant increases, generally 30 to 70 cents for the week.
“The broader microns, in particular 21 micron and coarser struggled to find the same buyer support as the finer sector and recorded small losses, generally 5 to 20 cents with inferior/lower spec types experiencing the largest falls as buyers became more selective in their purchases,” Mr Plunkett said.
Mr Plunkett said keen buyer interest in the crossbred market pushed prices higher for the fourth sale in succession.
“Again the main price rises were in the finer microns, in this case 25 to 26 micron were 30 to 40 cents dearer whilst 28 to 32 micron wools were generally 10 to 20 cents dearer.”
He said some of the heat left the skirting market this week as buyers chased micron.
‘Finer better style lots had increases of 20 to 30 cents for the week whilst the coarser microns had small losses of between 10 and 15 cents.”
Mr Plunkett said the oddment market ticked along steadily this week with carding indicators in all three centres rising on every selling day, increasing by an average of 19 cents, with demand for finer micron lines drove indicators higher.
Wool under 18 micron most sought after
Australian Wool Innovation’s weekly market report said the nation’s largest wool trader – Techwool Trading — and China’s largest indent buyer – Chinatex — were dominant in the sale rooms and together bought about 38pc of the Merino fleece sold.
Techwool Trading bought 19.4pc of the Merino fleece, 18.9pc of the crossbred fleece, pieces and bellies, 19.1pc of the Merino skirtings and 12.8pc of the Merino oddments. Chinatex bought 18.5pc of the Merino fleece offered.
AWI said the best superfine wools of 18 micron and finer were the most sought after. Any sale lots exhibiting the right specifications and quality for Europe and India were the receivers of substantial gains of anything upwards of 90c/kg clean, with some individual lots well over 130c/kg dearer.
“The almost 2pc advantage for those buying in Euro certainly aided their purchasing power.
“The weaker forex in the $A v $US largely masked the weakening in those Merino wool types broader than 20 micron.”
AWI said while the better wools basically maintained their price levels, any sale lots slightly off ideal specifications were 20 cents lower, as were the burry (more than 5pc vm) fleece lots, indicating top makers are becoming wary of producing tops in this quality zone considering the demand is stronger in the finer areas at present.
“As the price gaps continue to grow between microns though, the discount price will entice users back into the sector.”
Merino skirtings reverted to the trend of only the finest and best lots being chased and up to 40 cents dearer. AWI said carding wool prices remained at record levels and local manufacturing interest dominated the purchasing. Adelaide-based early stage processor Michell Wool bought 23.5pc of the Merino oddments offered.
All types of crossbred and comeback wool finer than 29 micron were generally 20-40c/kg clean dearer. The finer comeback (25 to 27 micron) were the most sought and showed the largest gains of around 35-45c/kg clean, AWI said.
AWI said a similar market trend seen at the close this week could be expected for the 44,000 bales rostered next week, with a more selective approach to purchasing and consolidation around these levels. A Tasmanian superfine sale will be held in Melbourne next week.
Sources: AWI, AWEX.