Wool prices have lifted for the third consecutive week. Image – AWEX.

AUSTRALIA’S wool prices lifted across all fleece categories this week as processors and traders moved to fill a reportedly near-empty greasy wool pipeline, despite overall global demand concerns.

AWEX senior market analyst Lionel Plunkett said the AWEX Eastern Market Indicator rise of 67 cents to 1609c/kg clean was the third consecutive weekly increase.

He said the national quantity reduced to 27,458 bales, as fresh wool was bolstered by sellers holding wool, waiting for market improvement.

“From the opening hammer on the first day in the eastern centres, it was immediately apparent that large rises were on the cards.

“Main buyer interest was in the 18.5 micron and coarser range, resulting in these wools getting progressively dearer as the day wore on, with all types and descriptions enjoying similar rises, as buyers scrambled for quantity,” he said.

“By days-end the individual Micron Price Guides of these wools rose by 60 to 90 cents in the east.

“In the west, which sold last, the rise in the MPGs was 90 to 100 cents,” Mr Plunkett said.

“On the back of these increases, the AWEX EMI rose by 61 cents for the day.”

On the second selling day was more subdued, only marginal increases recorded and the EMI rose by a further 6 cents.

“Over the previous three weeks, the EMI has now clawed back 244 cents of the 379 cents it lost over the month of August.

“Sellers were understandably keen to accept the increased prices, resulting in a national passed in rate of only 7.6 percent,” Mr Plunkett said.

“Worth noting, the fleece market noticeably softened toward the end of the series, so much so that the western region, again selling last, recorded falls of 30 to 70 cents on the final day.”

Mr Plunkett said the skirtings followed a similar path to the fleece and strong competition helped to push prices by 40 to 70 cents.

Buyers average dearer orders against earlier purchases

Australian Wool Innovation’s weekly market report said manufacturers were looking to fill the near empty greasy wool section of the wool pipeline, but warnings of demand remaining at low levels remain in play.

“The weaker prices of the previous month or so had seen some business written and some wool was needed at the lower levels to fulfil those orders and average some dear stocks through those orders.”

AWI said in US$ terms, the EMI gained 3.8pc or US39 cents to close the week at US1086c/kg clean.

“Once again for those buying using the US$, they were assisted by the A$ falling around 0.6pc against that currency.”

AWI said Australian auction purchase lists featured the largest locally-based trading exporters, particularly on the Merino fleece and crossbred sectors.

“Their activity was quite dominating as the top four took 60pc between them of the sold wool on these types.

“Processors took to the skirtings and cardings sector to get volume and both those segments were led by a European top maker and a dual local and Chinese processor respectively.”

AWI said the large jump in prices available at auction this week saw pass-in rates surprisingly high at around 8pc.

“With another 9pc of the original quantity withdrawn prior to auction, it appears grower sellers are still not unanimously happy with current levels.”

AWI said significant advice received at the conference from Chinese factories and yarn makers pointed towards the need from grower suppliers for ‘more 19.5 micron and 21 micron Merino please! In fact, some 22.6 micron as well – there is too much superfine Merino wool!’

“Some users are being forced to blend finer Merino with crossbred in order to achieve the ‘thicker’ yarns required and many warn of an inevitable bad image arising from this practice from consumers.”

National Council of Wool Selling Brokers of Australia executive director Chris Wilcox said despite the prevailing negative sentiment at the recent Nanjing conference, Australian exporters reported that there had been very good interest for immediate raw wool purchases by the Chinese clients.

“This led to the sharp lift in prices in the Australian auction market this week, particularly at the start of the week.

“It seems that early stage processing mills have little greasy wool stock to feed their machines,” Mr Wilcox said in his latest NCWSBA newsletter.

Next week’s national offering has increased considerably as a result of the price rises and there is currently 40,999 bales rostered in Sydney, Melbourne and Fremantle.

Click here to see the latest AWEX Micron Price Guides.