LOW supply and improved prompt demand helped lift wool prices in Australian auctions this week, seemingly helped by Chinese Government industry stimulus.

The Australian Wool Exchange said the market recorded a solid overall increase in the auction series, buoyed by increased buyer demand across all sectors.

“On the first day of selling, from the opening lot, buyer activity was noticeably stronger, the spirited bidding helping to push prices higher.

“By the end of the day, the movements in the individual Micron Price Guides for Merino fleece in Sydney and Melbourne ranged between unchanged and to increasing by up to 32 cents/kg clean,” AWEX said.

“As Fremantle did not suffer the falls felt in the eastern centres on the second selling day last week, the movements in the west were smaller.

“The MPG movements ranged between minus 1 and plus 9 cents.”

AWEX said with minimal movements in the skirting and crossbred sectors and a stronger carding market, the benchmark AWEX Eastern Market Indicator gained 9 cents for the day.

“This was the largest daily rise in the EMI since August.

“The strong buyer sentiment carried into the second selling day, where only Sydney and Melbourne were in operation,” AWEX said.

“Again, from the opening lot it was apparent that further price increases were on the cards.

By the close of the second selling day the movements in the Merino fleece MPGs ranged between unchanged and plus 25 cents.

“The EMI added another 8 cents,” AWEX said.

“This marked the eleventh selling day in a row where the EMI posted a single digit movement.

“The EMI closed the week at 1104 cents/kg clean, a weekly gain of 17 cents.”

AWEX said the two daily rises in the EMI in this selling series was only the third time in the 2024/24 selling season that this has occurred.

“The 17-cent rise in the EMI was the equal highest weekly rise this season, with a similar rise also recorded in Week 4 (24th of July).

“The EMI also rose in USD terms, the EMI closed the series at US763 cents, an increase of US14 cents.

Chinese Government stimulus helped – AWI

Australian Wool Innovation trade consultant Scott Carmody said buyer competition was at times combative in auctions, as the low volumes and an improved prompt demand saw the market trend towards the sellers’ favour.

“Merino fleece was most affected with gains of between 25 and 40 cents commonplace for the week’s trading,” he said.

“The major price factor though was the massive gain on Chinese share markets and property stock which surged to double digit percentage gains prior to the Chinese exchanges shutting for the Golden Week national holidays on Tuesday.

“Off shore trade continues bullish though,” he said.

“That good news from the general Chinese economy was fuelled by a series of Government stimulus measures.

“This significantly ignited investors’ enthusiasm and bolstered market confidence in an economic recovery sooner rather than later,” Mr Carmody said.

“This sentiment looks to be starting to flow through to the wool textile manufacturing sector and encourage some investment in the future, rather than focussing on today’s weak consumer spending.

“Time will tell if wool surges to price levels of a more economically sustainable nature,” he said.

Mr Carmody said the top Chinese top maker headed volume buying, but the top two local exporters bid up strongly, perhaps indicative of their confidence going forward.

Next week about 32,000 Australian stored bales are rostered. Auctions will be held in Fremantle and Melbourne on Tuesday and Wednesday, and in Sydney on Wednesday and Thursday.

Sources – AWEX, AWI.