AUSTRALIAN wool prices finished generally higher this week, in the final sale series for 2018 for a three-week recess.
Strong buying from major traders, Chinese and European buyers and processors, helped lift the benchmark AWEX Eastern Market Indicator by 13 cents to 1862c/kg clean, with only fine crossbred and Merino Carding types dipping in price.
Australia’s largest trading company Techwool Trading purchase 6507 bales, or 14 percent of the 46,003-bale offering. Brokers passed in 7.6pc of the offering.
AWEX senior market analyst Lionel Plunkett said with the recess looming, buyers were aware that this was their last major buying opportunity for the year.
“This resulted in an aggressive buyer sentiment, as they fought hard to secure meaningful quantity.
“The result was price increases across the entire Merino spectrum, with all types and descriptions enjoying gains,” he said.
“The EMI has risen by 102 cents over the 2018 calendar year, a rise of 5.8pc.”
Mr Plunkett said the skirtings did not record any significant movement for the series and prices fluctuated within 10 to 15 cents of the previous week’s levels.
“Crossbred wool coarser than 28 micron recorded modest increases of 5 to cents.”
Mr Plunkett said the oddments finished the year with price reductions.
“Prices for locks, stains and crutchings were generally reduced by 30 to 50 cents. This was reflected in the three carding indicators falling by an average of 44 cents.
Big buyers come out to compete on last sale
Australian Wool Innovation’s weekly market report said the largest trading company buyer in Australia — Techwool Trading — completely took to their market purchasing in force.
“They exerted significant muscle across all types and descriptions and topped nearly all buying lists by quite some way.
“It has been some time since we have seen one company take over 6500 bales for a sale series,” AWI said.
“When you consider a price of over $2000 per bale, that is quite a heavy spend and sends a very positive signal to not only the trade, but it also gives confidence to wool growers, many of whom are facing very trying times in regards to the harsh seasonal conditions.”
The AWI report said the big Chinese indent trader (Seatech) stepped into the market again to try to buy once more, but its operations seem to be restricted to the Merino fleece segment.
“Other local trading houses were also participating keenly, but the big buyer was just too strong in buying intent.
“It made no sense for them to push up the price as their purchase volume and price would only go further away from their clients’ ability to pay the price,” AWI said.
AWI said the largest Chinese top making company (Tianyu) continued to try to build inventory and has been the most consistent supporter to Australian wool growers, remaining steadfast and consistent in purchasing through market lows and highs.
“The big top maker in Europe (Modiano) also bought strongly, but its focus appeared to be at the cheaper end of the market on the crossbred and skirting sectors.”
Wool sales will resume in the week beginning Monday, 7 January (Week 28) with selling in all three centres. If quantities dictate that Melbourne requires a three-day sale, Fremantle will sell on Tuesday and Wednesday in Week 28, AWEX said. This change is to avoid Melbourne selling in isolation after an extended recess.
Sources: AWEX, AWI.