Wool prices rebounded in Australian auctions this week. Image – AWEX.

WOOL prices rose strongly this week, driven by interest from multiple buying companies, according to the Australian Wool Exchange.

AWEX’s weekly report said strong spirited bidding helped to push prices higher from the opening lot, with all prices generally continuing to strengthen as the series progressed.

“The largest price increases were experienced in the 18 to 21 micron range, and by week’s end the individual Micron Price Guides (MPGs) in this range, had risen by between 62 and 111 cents.

“As the finer microns continue to rise at a greater rate than the broads, the price differentials between microns continues to widen,” AWEX said.

“At the opening sale of this calendar year, the average price difference between the 18 MPGs and the 21 MPGs, was 444 cents, and by the close of this week’s series that difference has extended to 569 cents.”

AWEX said on the back of the strong gains in the Merino MPGs the AWEX Eastern Market Indicator (EMI) rose by 43 cents, closing at 1318c/kg clean, up 3.4 percent.

“Due currency movements, when viewed in US dollar terms, the rise in the EMI was marginally higher, the EMI added US37 cents, closing at US1022 cents, a 3.8pc rise.

“The EMI has now risen in four out of the six sales held so far in the 2021 calendar year, adding a total of 161 cents over this period, a gain of 13.9pc,” AWEX said.

AWEX said the EMI is now at its highest point since March 2020.

The oddments was the only sector to recorded losses this week, with the three Merino carding (MC) indicators dropping by an average of 17 cents. The negative movement in this sector prevented the EMI from posting a larger gain than it did, AWEX said.

AWEX said the large price increases have enticed more sellers to the market, pushing next week’s national offering higher. There are currently 52,614 bales on offer in Melbourne, Fremantle and Sydney which is a designated superfine sale.

Indian competition put pressure on prices

AWI trade consultant Scott Carmody said requests for wool from China were reportedly slowing at the commencement of these sales.

“The Lunar New Year celebrations may have had an influence.

“Despite the apparent waning in appetite for new business from the PRC, discussion from show floors arrived of fresh enquiry and conversion to forward contracts from India,” he said.

“Many buyers commented how easily this competition transferred price pressure onto all users as levels ascended.”

Mr Carmody said trading companies dominated the Merino fleece and skirtings sectors, with top makers and indent buyers appearing unwilling to be convinced of the longevity of current prices.

“Instead, the top makers and processors looked to the crossbred and carding sectors as more of a value proposition for their current circumstances.

“Wool market competition again displayed patterns towards the pre-pandemic economy methods of operation,” he said.

Click here to see the latest AWEX Micron Price Guides.