GOOD style high yielding sound Merino wool and coarse crossbred fleece fared best in another general fall in the Australian auction market this week.
AWEX senior Market analyst Lionel Plunkett said after recording healthy gains during the previous week’s series, the Australian wool market could not maintain the upward trajectory, recording losses this week.
“As only Sydney and Melbourne were in operation, the national offering was just 21,787 bales, this was the lowest weekly quantity since June 2018.
“The small offering may have had a negative impact, as some exporters were not confident of filling orders, with such a limited selection available,” he said.
“This meant that some buyers were not as active, as they would have been when a larger quantity is available.”
Mr Plunkett said the limited number of good style wools with favourable additional measurements were highly sought after and these wools recorded minimal change for the series.
“Lesser style lots and those carrying poor additional measurements lost ground, generally 30 to 50 cents.
“These losses pushed the individual Micron Price Guides (MPGs) down by 20 to 40 cents,” he said.
The AWEX Eastern Market Indicator lost 23 cents to close at 1864c/kg clean, with brokers passing in 15.5 percent of the offering of 21,744 bales, 6529 fewer than last week. The EMI in $US terms lost 7 cents to US1299c/kg.
“The EMI has now fallen for four out of the previous five weeks, losing a total of 96 cents since Week 44.”
Mr Plunkett said the crossbred sector also tracked downward, but not as steeply as the Merinos, with prices generally falling by 5 to 10 cents.
“The 30 micron wools; however, managed a small increase for the week, the only quoted MPG to record positive movement for the series.”
Mr Plunkett said the cardings lost further ground this week. The three carding indicators have now fallen by an average of 571 cents, from the record highs set in September last year.
Australian Wool Innovation’s weekly market report said the best end of the Merino fleece offering and the broadest crossbred fleece were the only sectors remaining unaffected at similar trading quotes.
“Price levels drifted by a general 30 to 40c/kg clean as buyers became more hesitant as the sales progressed and the cheaper levels appeared more prevalent.”
AWI said the competition at auction sales in eastern Australia was again somewhat hampered by the lack of the “normal” participation rates of the big two Chinese trading indents.
“Counteracting this though was the positive purchase activity of the two largest Chinese top makers who topped buying lists and showed no signs of weakening in their buying intent.
“Strong support for the market also came from our local traders who also took the opportunity to pick the eyes out of the selection,” AWI said.
However, AWI said perhaps the largest influence on the cheapening market this week was the almost non-existent competition against one of the Chinese top makers on the numerous sale lots exhibiting low yield.
“Lots showing a yield of around 55pc dry and less were sold under hard auction conditions whereby just the single buyer was interested.
“As the price levels dropped, this negative sentiment flowed through to most other sections.”
AWI said the better specifications sale lots with good (over 64pc dry) yields held onto their established levels well, while any sale lots of lesser yield or lesser specifications became exponentially cheaper as the week progressed.
“By week’s end, the levels for wools finer than 18.5 micron fell away 70 cents on the lower end types and on the broader than 18.5 microns up to 50 cents reductions occurred.”
Sales resume in Fremantle next week after a one-week recess and this has helped to push the national quantity up to 29,989 bales, with selling in all three centres.