The AWEX Eastern Market Indicator closed down three cents on 1085c/kg clean, with 7.8 percent of the 42,488-bale offering passed-in with the Australian dollar at US78.23 cents, and the EMI in US$ terms at 849 cents, down six cents.
In Australian Wool Innovation’s Weekly Wool Market Review, consultant Scott Carmody said financial restraints appeared to restrict some normal operation activities this week and neither the slightly weaker Australian dollar against the US currency nor the smaller offerings had a positive impact on the market.
“Appearing to hamper the market at present is a slow rate of enquiry from China since their New Year period and also some local buyers’ finances are stretched to the limit awaiting upon some execution of Letters of Credit.
“As we enter into a traditional downturn in volumes in the availability of Australian wool for a few months, hopefully we can see demand over ride supply and kick the market along,” he said.
“A weaker but stable A$:US$ would also help.”
No price change for better, stylish wools with tensile strength
Mr Carmody said pockets of small rises were taken in Melbourne within the super fine Merino and fine crossbreds categories and in Sydney on some areas of the Crossbred selection.
“All other sectors saw prices drift away to lower levels.”
Mr Carmody said a much smaller offering of the better, stylish wools of good strength in the super fine (18.5 micron and finer) Merino fleece were put up for sale this week and prices showed no reaction at all and remained unchanged throughout.
“The average and inferior top making descriptions sold well early in the week, but showed some weakening on the final day, particularly the lots showing high coefficient of variation hauteur and high PoBM (position of break in the middle) test readings and also the over long (>100mm greasy staple length) lots,” he said.
“Fine and medium (19 to 23 micron) Merino fleece experienced somewhat of a tumultuous market through the week, with prices falling away by upwards of 15 cents a kg clean at some stages of selling.
“Price levels corrected strongly towards the end of the week and only minor losses of around 5c/kg clean were eventually recorded.”
Mr Carmody said volumes in this area of the Merino fleece type selection are continuing to grow as the super fine wools are getting “out of season” and on farm production of the finer microns are swinging towards a heavier cutting wool type of a broader micron.
“Additionally a lot of the growing regions have experienced good climatic conditions over the past 12 months, which have not only pushed the micron broader, but has caused exceptional staple length growth resulting in some discounting to appear on any overlong lots.”
Finer crossbred wools still sought-after
Mr Carmody said Merino skirtings experienced yet another uneventful week at unchanged levels and appeared to have reached a point of price sensitivity where forward sales are limited.
“Some sporadic and lower bids are now being put before the exporters, but most are wanting to complete their current commitments prior to taking any more open positions into their inventory.
“The carding market also appears to have stalled for the time being and most prices achieved this week were similar to the previous sales series,” he said.
“Indicators at each of the three selling centres were largely within 5c/kg clean by the conclusion of selling.
“Demand for wool types suitable for open/broken top production remained steady and quotes closed out the week at firm unchanged levels,” Mr Carmody said.
He said crossbred and comeback (25 to 32micron) types repeated the pattern formed two weeks ago, with the finest of the types (finer than 27 micron) being well sought and 5 c/kg clean kg dearer mainly due to lack of volume. The broader section lost 5c/kg clean.
“An exception was the very broadest types of around 31 to 33 micron which held on well and managed a few cents rise in the Sydney auction.”
Fremantle values marked down, but closed firm
AWEX senior market analyst Lionel Plunkett said on Wednesday the market deviated from recent patterns when lower spec types outperformed the better types.
“As a result the price bands within various microns tended to compress, narrowing the gap between the top-tier types and those which typically get heavily discounted.
“Muddying the price signals on that day was a mark-down in values in Fremantle; most of the fleece sector in that region was discounted by 15 to 20 cents despite the relatively stable market on the east coast,’ he said.
“Thursday was more consistent with price movements heading marginally lower in all three regions. “It was a reversal in the pattern from the previous day with the lower types losing the most ground and re-establishing a larger price differential,” he said.
Mr Plunkett said Fremantle again deviated from the other markets, closing out the week on a firm note late in the day. Merino skirtings had an uneventful week and closed at similar rates to the previous sale.
Crossbreds also had only minor changes; the mid-range of 28 to 30-microns eased 5 cents whilst other microns generally closed on a firm basis, Mr Plunkett said.
The Merino carding “Room 2” types closed out the week on a similar footing to the previous sale. After dipping to 42,488 bales this week volumes are forecast to settle to around 45,000 bales each week over the period leading up to the Easter recess in early April.
Sources: AWEX, Australian Wool Innovation.