PRICES for Australian wool prices improved for all but finer Merino types at auctions this week as buyer confidence improved.

AWEX senior market analyst Lionel Plunkett said the AWEX Eastern market indicator recorded an increase for the first time in over a month, rising 5 cents to 1781c/kg clean.

“However, the increase was mainly a result of solid gains in the carding and crossbred sectors.

“The Merino fleece market performed with mixed results, with all three centres recording varied outcomes for similar wools,” he said.

“A large selection of fine tender wools struggled to attract strong buyer demand, this contributed to the Micron Price Guides (MPGs) of 19 micron and finer generally falling by 30 to 50 cents.”

He said 19.5 to 20.5 micron fleece wool attracted excellent competition and managed modest increases for the week, while a limited selection of 21 micron and coarser lines were generally unchanged when compared to the previous sale.

Mr Plunkett said as a result of the finer microns suffering larger losses over the previous few months, the price differentials between microns has shrunk considerably.

“This is best highlighted when looking at the difference between the MPGs of a 19 and a 21 micron.

“Currently, this difference is averaging only 47 cents, compared to over 110 cents when the MPGs peaked back in August.”

Mr Plunkett said the skirtings had an up and down week, losses were felt on the first selling day, then gains on the second, resulting in prices being generally unchanged.

“As mentioned earlier, the crossbred sector recorded gains for the week.

“Prices generally increased by 5 to 25 cents, with the largest gains felt on the better prepared lines.”

After two months of continual large losses, the oddment sector has finally recorded price increases, Mr Plunkett said, with locks, stains and crutchings generally rising by 50 to 120 cents.

“These rises helped to push the three carding indicators up by an average of 89 cents.”

Some buyer confidence returning – AWI

Australian Wool Innovation’s weekly market report said some semblance of confidence has appeared in Australian wool auction sales rooms.

“Widely variable results were being published, but by and large, the trade by week’s end were all reporting better price levels and sentiment within the selling centres.

“The origins of this change and the longevity remain uncertain, but the positive nature of the action this week was naturally warmly welcomed by grower sellers.”

AWI said the most notable of trade movements was again recorded in the Euro as the $A has been getting exponentially stronger in recent weeks when compared with the other major currencies used in the trade.

“This week saw a further 1.1pc jump when the EMI is expressed in Euro.

“In fact, the Euro forex rate has gone from 62.02 to 64.20 making a collective gain of 3.52pc in just three weeks,” AWI said.

“This makes it more expensive to purchase wool for those using this currency, but it hasn’t stemmed the demand from those users, as they have continuously supported the better super fine Merino types throughout this downturn and continue to do so despite their rising currency.”

AWI said the where the better activity from auction buyers came from is somewhat unknown, but it was clear the prices being offered were significantly better in several identifiable type sectors.

“Seller resistance was less this week, although 10.9pc of the offering still failed to reserves and was subsequently passed in.

“Looking forward, the next three weeks has a staggering 32.2pc less wool currently scheduled to sell than at the same three-week period of auction sales last year,” AWI said.

“With the dropping supply having had little, to no effect, on the market thus far, perhaps the market may have found its feet for now.”

Next week’s national offering remains very similar, with currently 35,334 bales on offer.

Click here to see the latest AWEX Micron Price Guides.

Source: AWEX.