AUSTRALIA’S wool market started the 2024/24 wool-selling season softly this week, led mainly by Chinese interests.

The Australian Wool Exchange said the market recorded an overall loss for the third successive series with the AWEX Eastern Market Indicator losing 17 cents to close at 1125vc/kg clean.

For an opening sale the national quantity was relatively low, there was a total of 34,231 bales available to the trade, AWEX said.

“The bulk of the losses were felt on the first day of selling, particularly in the fleece.

“This was reflected in the individual Micron Price Guides (MPGs) in this sector, that across the country dropped by between 3 and 38 cents.”

AWEX said the other three sectors also recorded overall negative results.

“As a result of these falls, the benchmark AWEX Eastern Market Indicator (EMI) fell by 13 cents for the day.

“On the second selling day the market settled to a degree, with generally single digit market movements recorded, the exception being the 18 micron and finer MPGs in the north, where the losses were larger.”

AWEX said it was worth noting that the selling in Fremantle createdd a small overall increase in the Western Market Indicator, driven by gains across all MPGs 18.5 micron and coarser. The EMI dropped another four cents for the day.

“Despite the losses experienced this week, clearance rates remain relatively high, only 8.2pc of the offering was passed in,” AWEX said.

“Many were hoping for a strong start to the new season, like the opening of the previous season.

“Week 1 last season the EMI rose by 36 cents, mainly because of rises in the Merino fleece MPGs of between 13 and 77 cents.”

Chinese top makers to the fore – AWI

Australian Wool Innovation trade consultant Scott Carmody said the auctions opened for the 2024/25 season on a weak note.

“The cheapening trend remained in place, which saw almost all types and descriptions on offer record lower prices again, amidst a subdued sale room atmosphere.

“The combined forces of the three largest Chinese top makers were again to the fore of purchasing lists,” he said.

“These buyers were increasingly active as the auction price levels diminished alongside a cheapening Australian dollar against the US dollar and Chinese yuan.”

Mr Carmody said Australia’s largest trading exporters remained active, but not in the market leading role they would usually be playing.

“Traders report that business is very hard to come by at present, with the sporadic enquiry leading to just minimal new contracts being written.

“The majority of the current enquiry for new business is still emanating from Chinese based users and traders,” he said.

“Very little evidence is apparent in sale rooms of any significant Indian buying since the activity of a few weeks back, nor has there been any signs of the emergence of interest from the few remaining European buyers.

“Some buying of the best superfine Merino by Italian mills has been seen, but selection and volume just isn’t there yet for those specialist, mainly worsted, buyers.”

Mr Carmody said the crossbred wool types are holding on much better than any other sector.

“This is possibly a reflection of the current environment in the large Chinese domestic market, whereby consumers are reportedly still wanting to choose to purchase wool products, but at ever cheaper retail price points. “

Mr Carmody said logistics problems have also returned with gusto and are heavily impacting speed of delivery globally.

“Massive price increases have also been felt.”

Next week the national offering is expected to fall. There are currently 32,398 bales on offer. Fremantle will now be a one-day sale, due to limited quantity, selling on Tuesday. If this full quantity eventuates it will be 11,299 bales less than Week 2 last year, where there were 43,697 bales on offer.

Sources – AWEX, AWI.