Australian wool prices made their biggest weekly gains in 17 months this week, with fine wool lifting up to 50 cents and crossbred lines selling over 800 cents, the Australian Wool Exchange reported.

AWEX senior market analyst Lionel Plunkett said there was solid interest for all wool types this week, sending the AWEX-EMI above 1100 cents for the first time since Feb 2013.

“The 31-cent rise was the largest weekly gain in 17 months,” he said.

AWEX’s Eastern Market Indicator closed the week on 1101 cents, with the Australian dollar trading at US77.82 cents, only 3.8 percent of the 45,398 bales offered nationally being passed in.

Best style, high tensile strength fine Merinos move first

Mr Plunkett said the market started off in a similar fashion to last week, with most action in the finer ranges.

“Best style and 40Newtons/kilotex wools were initially the focus, rising 30 to 50 cents in the 18.5 and finer range, while demand for the lower spec types and those in the medium-broader category was less urgent on the opening day.

“There was a reversal of fortunes on Thursday however, when support for the better types moderated as buyers turned their attention to the lower spec grades and those in the broader microns.”

Mr Plunkett said a jump in price levels of 30 cents was not uncommon and a number of lots in the 20-micron and broader range traded over 1200 cents.

“Adding to the positive vibe was a strong finish to the day in Fremantle, which closed out the week outperforming the east coast in selected pockets.

“As with previous sales demand for Merino skirtings was less buoyant.”

Crossbred prices jump 20-30 cents

Mr Plunkett said the skirting gains of 10-20 cents were reassuring and added to previous rises, but these wools have underperformed when compared to the fleece sector over the past few weeks.

“Crossbreds jumped 20 to 30 cents on the back of a strong opening day, pushing the 28 Micron Price Guide through the 800-cent milestone for the first time since 2002.

“Merino cardings also had healthy rises, increasing as much as 35 cents.”

Mr Plunkett said all three regional Merino Carding Indicators are now at record levels. The focus on superfine types will continue next week with a one-day sale of Tasmanian wool in Melbourne.

Foreign exchange rates ensured ‘positivity’ continued

Australian Wool Innovation consultant Scott Carmody said renewed forward buying interest from most global Australian wool user destinations and advantageous foreign exchange rates ensured the positivity of last week continued this week.

“New record levels on most carding types was the highlight of the sale series across the three national wool selling centres, with Merino locks shooting well into the 900’s ac/clean kg and Merino sale lots suitable for carbonizing going well over the 1000 ac/clean kg mark.

“The past fortnight has seen a general appreciation of wool prices of five percent, but some individual types have seen quotes and forward offers rise by up to 10pc in some cases when expressed in Australian dollar terms,” he said.

“Forward selling exporters were fully expectant of the market being dearer again, which was validated by their strong sale room operations.

“In nearly all sectors away from the crossbred fleece, these buyers were dominate over the Chinese indent order buying companies.”

Mr Carmody said while decent orders had been booked up since the previous Friday, it was the overnight activity on Wednesday that really solidified the demand upswing was there.

“Most noticeably was that new orders were for prompt or March shipment, indicating low stock levels globally.

“A significant downturn in the Euro:A$ of over 2pc week-on-week also allowed the strong European interest on the super fine Merino fleece area to extend by a further 3-5pc,” he said.

Mr Carmody said increasing offering in volumes over the next few weeks, as growers commit more wool to auction, will test the resolve of the market.

“If the strong bull market extends, the reducing volumes post February should see a bright outlook for wool markets in the immediate to mid-term.”

Sources: AWEX, AWI