China leads global lift in wool interest at auctions

Sheep Central, January 20, 2023

AUSTRALIAN wool prices improved slightly this week at auctions across Australia this week, and especially in Western Australia, despite another large offering.

The Australian Wool Exchange said the offering of 47,343 bales, 3166 fewer, sold over three days yielded a small but encouraging rise in the AWEX Eastern Market Indicator.

The AWEX EMI lifted eight cents to 1341c/kg clean, with brokers passing in just 5.7 percent of the offering.

“Merino types opened with continued momentum lifting prices between 10 and 40 cents clean on the opening day.

“Wednesday was more subdued but generally had most descriptions finish slightly higher, whilst the Melbourne-only sale on Thursday closed out the week on a soft note, with the EMI easing back two cents,” AWEX said.

“Within each micron significant price variations became increasingly apparent as the week unfolded.

“In particular, lots with a low CVH (Coefficient of Variation of Hauteur – a measure of length variation in processed wool) were keenly sought whilst larger discounts appeared for high CVH measurements.”

Buyers also discounted lots showing overlong characteristics (generally those over 100mm).

“Merino pieces pricing tended to be more consistent with solid results across most types.

‘Finer microns generally found the most support, particularly those with sought after specifications including best length and low VM types,” AWEX said.

“The increasing supply of crossbreds (27pc of the catalogue) showed slight improvements via the Micron Price Guides although large price differentials were also evident in this sector with poorly-prepared lots largely neglected.

Merino cardings showed little change for the week. Next week there are 46,535 bales currently rostered for sale. All centres will sell in a two-day Tuesday/Wednesday pattern given the national public holiday to be held on Thursday.

Western Australia was the top performer – AWI

Australian Wool Innovation trade consultant Scott Carmody said the solid start to the second half of the Australian wool auctions season continued with strength this week, with almost all types and descriptions holding or adding values.

“The large offerings which are normal for this time of year has failed to dampen the buying enthusiasm of mainly the locally based traders and exporters dealing with the global demand requests.”

He said the market has been heavily supported by Chinese interests, but some good orders from outside that nation are adding to the consolidation of prices that largely occurred this week in all currencies.

Mr Carmody said the Western Australian market was the top performer this week.

“The predominantly Merino offering of 18 to 21 micron in the Fremantle sale room was fetching upwards of 35 cents more as the competition in that region outshone their eastern state counterparts.

“Similar wool types in the Sydney and Melbourne selling centres did add some values but to the extent of just 5 to 20 cents.”

He said the superfine Merino wools of finer than 18 micron came under particular attention in both Eastern centres and rises of 40-55 cents were registered to established quotes by the close of selling.

Mr Carmody said the large crossbred selection was interestingly a clash of the big European top maker, the large Chinese indent operator on these types and local traders.

“The widespread support of these wools is somewhat encouraging and prevented any further price degradation this week.

“The oddments purchasing was led by the largest local and Chinese bases first stage manufacturer,” he said.

“The relatively strong demand since December has produced slowly improving wool prices that for the long term future of wool values, is encouraging for price stability.

“The market has, for the moment, stepped away from the sharp spikes and steep and swift falls that wool prices can be subjected to and perhaps indicative of a more stable demand scenario now that the global users are getting back to somewhere near normality in operations – both in sales of wool products and personnel concerns,” Mr Carmody said.

Click here for the latest AWEX Micron Price Guides.

Source – AWEX, AWI.


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