Trade

Australian crossbred wool prices reach 12-year highs

Sheep Central December 12, 2014

Wool_samplesCrossbred wool prices reached 12-year highs this week despite the largest offering since 1996, AWEX market analyst Lionel Plunkett said.

Mr Plunkett said crossbred wools formed a large proportion of the catalogue this week, with 13,957 bales of combing types offered.

This was the largest offering of XB’s since the corresponding week in 1996 (that year it totalled 133k for all types), he said.

“The large selection did little to dampen demand with most microns around 10 cents higher.

“The 28 and 30-microns pushed higher for the sixth consecutive week and closed out the year at 12-year highs.”

China’s new uses for crossbreds boosting demand

Techwool Trading export trade manager Josh Lamb said traditionally crossbred wools always went into home textiles – curtains and carpets,

“What has happened over the last three to four years is that China has developed some new processes and products where the majority of crossbreds in that 27-31 range are now going into heavy women’s overcoats and skirts.

“That part of the market in China, from a retail point of view, has gone mad, hence that is driving the price.”

Mr Lamb said New Zealand crossbred wools did not have the handle of the Australian crossbreds.

“At the end of the day, New Zealand, South America and Australian crossbreds, they’re all essentially going into the same products in one way or another, it is just how they put the blends together that varies.”

They are using different price points to make different products.”

He said crossbred wool prices are pegged to the US dollar.

“So the more the US dollar goes down, the more the ACOF (Australian Clean On Floor) market is going to go up here.”

 Largest wool sale in more than three years

Mr Plunkett said the final offering of 58,622 bales represented the largest sale in three and a half years and a weak opening at the Melbourne-only auction on Tuesday gave a less-than-enthusiastic signal for the rest of the series.

“The better types outperformed the lower-spec categories, but generally prices were 10 to 15 cents lower.

“Sentiment improved over the following two days however, with slight increases in Melbourne and Fremantle on Wednesday, followed by a general firming of 5 to 10 cents on the final day of auctions for the calendar year.”

He said despite the strong finish the sale-on-sale result was mixed.

“Sydney closed lower for the finer ranges but all other regions and microns were mostly 5 to 15 cents higher for the sale.

“Merino skirtings tended to track the fortunes of the fleece catalogue with an early dip in prices capped off by a strong finish,” Mr Plunkett said.

Carding types also found good support, with the Merino carding indicators rose between 5 and 21 cents depending on the region.

The AWEX-Eastern Market Indicator finished the week on 1059 cents, up five cents, with a national pass-in rate of 8.9 percent. The Australian dollar was at 83.39 cents and the EMI in US cents fell one cent to US883 cents.

Positive approach to Merino fleece and skirtings

Australian Wool Innovation consultant Scott Carmody said while the crossbred and carding sectors have been performing exceptionally well for some time now, it was the positive approach by overseas users to the Merino fleece and skirtings in the sale that differed from recent trends.

“Demand, and therefore competition and prices appeared to be stronger in this area as exporters reported new forward bookings at higher levels and several requests for offers for prompt or short time shipment.

“As a result, the buyers’ enthusiasm saw them take the EMI (Eastern Market Indicator) to a closing level of 1059ac clean/kg, which represented a handy 5 cents clean/kg rise for the series and the highest point the EMI has been for 10 months.”

Melbourne wool sale started softer

Landmark wool risk manager Anthony Boatman said sales opened in Melbourne on Tuesday with softer prices for the Merino fleece wools on offer.

“The low Australian dollar was not able to positively affect prices despite dropping under 82.5USc.

“Prices were 5-10 cents lower for the 19 micron and finer wools, while 19.5 and 20 micron categories experienced the largest falls of 14 cents,” he said.

“Broader categories were little changed.

“Crossbreds picked up a few cents, and oddments made solid gains of up to 15 cents.”

Merino fleece prices recovered some of the losses on Wednesday, with fine wools 5-10 cents dearer, and medium microns up to 10 cents higher, Mr Boatman said.

“Crossbreds remained well sought-after, with most lots selling firmer.

“Further increases on Thursday of around 5 cents across most categories saw the market close out the year on a positive note.

“Merino fleece wools lifted within a range of 4-7 cents, while crossbreds made slight gains, closing out the year at 12-year high levels.”

Sydney crossbreds continued good run

Mr Boatman said the Sydney market followed Melbourne’s lead in initial sales on Wednesday, with most Merino wools on offer easing back 5-10 cents.

“Crossbreds continued their good run of support, with small gains recorded throughout, and oddments also increased, placing the Merino Carding Indicator in the north above 800 cents.”

On Thursday, the market was firm with prices edging higher in the Merino fleece catalogue.

“Crossbreds on the other hand continued to rally, with gains of around 5 cents.

“As in the southern market, crossbreds continued to post gains and closed the year on 12-year highs.”

Oddments also lifted marginally higher, with the merino carding indicator closing the year above 800 cents, Mr Boatman said.

Fremantle’s 18.5-22 microns Merinos lift 5-10 cents

In Fremantle on Wednesday, prices lifted 5-10 cents across the 18.5 to 22 micron categories, recovering last week’s losses, Mr Boatman said.

“Good gains continued into Thursday, with 19 micron and finer wools pushing 10-15 cents higher, and 19.5 to 22 micron wools up 5-10 cents higher.”

Mr Boatman said the gap between the east coast and west coast prices for individual microns has eroded, with 19 through to 22 micron wools worth similar money nationally.

“The 18 and 18.5 micron wools still lag behind the east coast however, by 20-30 cents.”

Forward markets continue to be well bid post sales, with buyer interest throughout the forward curve at levels relatively close to current prices, he said.

The next series of auctions will be held after the annual three-week Christmas recess, commencing on January 5th 2015.

Sources: AWEX, Landmark, AWI, Techwool Trading.

HAVE YOUR SAY

Your email address will not be published. Required fields are marked *

Your comment will not appear until it has been moderated.
Contributions that contravene our Comments Policy will not be published.

Comments

Get Sheep Central's news headlines emailed to you -
FREE!