Trade

Australian wool prices record sixth consecutive week of rises

Sheep Central, April 24, 2015

wool bales dec15-14Strong demand for knitting wool from the seemingly declining Australian wool clip helped push prices higher this week.

The AWEX Eastern Market Indicator rose 23c/kg clean this week to 1153c/kg with a clearance rate of 98.1pc from an offering of 46,370 bales. This was with the US-A dollar exchange rate relatively static around US77.5 cents, putting the EMI in US dollar terms at 894 cents, up 18 cents.

Mr Plunkett said sales on Wednesday were characterised by keen demand for Merino fleece across all microns resulting in increases of about 25 cents including types of lesser specification.

“Merino skirtings recorded similar percentage increases to that of fleece particularly in lower vegetable matter content levels.”

He said crossbreds recorded modest gains of about 5 cents.

“Demand for lambs, locks, crutchings and stains continues to be keen and were generally 10 to 15 cents dearer, particularly well-prepared lots.

“Thursday sales consolidated or improved sellers’ favour upon Wednesday levels across most categories.”

Price gap between fine and medium wools widening

Mr Plunkett said the offerings this week contained slightly more wool from hold stocks than last week, though not significantly more.

“In recent weeks one noticeable trend is the increase in the price spread between the 18 and 22 AWEX Micron Price Guides to (now) between 160 and 170 cents.

“A range of this order was last observed in February 2013,” he said.

“This range has been steadily increasing since July 2014 from a narrow range of 20 to 30 cents.”

Strong market likely to continue

Australian Wool Innovation trade consultant Scott Carmody said fresh sales, continued enquiry, diminishing volumes, strong local auctions and a relatively stable foreign exchange all point to a likely strong market scenario.

“Although the general 80c/kg clean rise in Merino fleece and 50 cent rise in other areas may see those sectors slow somewhat as buyers adjust to the new levels.”

Mr Carmody said improving purchasing interest from global wool users saw the Australian wool auction sales produce another startling good result for growers this week. All types and descriptions were under heavy buying demand and appreciated in price daily, he said.

The Merino sector attracted the severest of the competition and reaped the best of the price rises, with the AWEX-EMI now at a three-year high.

Mr Carmody said some real price gaps are beginning to re-appear for ultrafine (finer than 16.5 micron) and Super fine Merino fleece (16.5 to 18.5 micron) types over their broader Merino counterparts.

“A select few lots of spinners/best top making style sound wools achieved 60c/kg clean gains, whilst the general market types managed to put on up to 30c/kg clean.

“A large portion of the micron indicator gains came from the lower end segment of the high pobm and average top making types which have moved upwards towards the general quotes as quantity diminishes rapidly within this micron area.”

Mr Carmody said the fine wool (18.6 to 20.5 micron) and medium (20.6 to 23 micron) Merino fleece almost replicated the market of last week, with the Chinese indent operators forcing another 30 to 45ac/clean kg gain into the closing quotations.

“The strength and intent of their buying interest flowed almost immediately to other buyers, resulting in a very competitive environment for the entire week.

“There was no apparent signs of any pullback as the auctions drew to a close, and in fact, a slight upwards push on better wools was seen.”

Low VM skirtings in demand

Merino skirtings achieved general gains of 15-25c/kg clean, he said.

“Demand centred strongly on the better style pieces and broken descriptions of lower VM (vegetable matter) levels, which were generally less than 6pc in VM.

“The heavier VM pieces and bellies sale lots suitable for carbonizing were also well-sought, and managed a healthy price gain of between 10-15c/kg clean.”

Cardings within the Merino types and description sector continued their climb towards the 1000c/kg clean mark, he said, with the southern indicator falling just two cents short of that mark.

“Good and best colour Merino cardings were the most sought after, with 15-20c/kg clean more being paid by buyers this week.”

Mr Carmody said the strong demand for all open/broken top types and descriptions continued throughout the week, with a general 20c/kg clean being added to their market rates.

“Whilst the shorter end types remained at firm to slightly dearer prices, the longer edge of the type bracket escalated substantially by 30-35c/kg clean, making up most of the general 20 cent rise.”

Mr Carmody said a very similar market again this week was apparent on all crossbred and comeback (25 to 32micron) types.

“Fleece types across the micron spectrum were generally 5c/kg clean dearer, with the largest trader of these types noticeable by their non-appearance in the “top buyers” list.

“Crossbred skirtings and cardings sold at a fully firm unchanged basis for the week.”

Sources: Australian Wool Innovation, AWEX.

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