Chinese demand for Australian crossbred wool continued to firm this week, while the best stylish Merino spinners’ types maintained premiums over lower spec lines.
AWEX chief analyst Lionel Plunkett said the AWEX-EMI ended lower this week despite a continuation of the firming trend in the crossbred sector.
The AWEX EMI finished two cents lower at 1088 cents after being dragged lower by the Merino fleece sector. Brokers passed in 8.5 percent of the offering with the EMI in US dollar terms finishing at US855 cents and the Australian dollar trading at US78.59 cents, up 0.62 cents.
However, Mr Plunkett said the EMI’s dip into negative territory was only minor, with the majority of the movements in the 3-5 cent range for the East Coast Micron Price Guides (MPG’s).
Crossbred wools were the stand-out
Crossbred wools were the stand-out for the week with an increase of five cents for most microns, Mr Plunkett said.
“Quantities of crossbreds increased by 1000 bales when compared to last week to just over 9000 bales (26 percent more than the season average) but are consistent with volumes for the same time last season.”
In Sydney, the 25 micron MPG lifted 20 cents to 993 cents and 26 micron wools rose 11 cents to 899 cents.
Melbourne-based company Kathaytex (Vic) buying for Chinese interests bought the biggest share of the offering – 23.9 percent or 2132 bales – followed by Chinatex, which purchased 1792 bales, or 20.1pc.
Demand for specific 25.5 micron type
Chinatex Australia managing director Liang Zhihua said crossbred wool prices in US dollar terms were mostly firm this week due to the slight lift in the Australian-US dollar exchange during the sale.
But he said supplies of 25.5 micron crossbred wool for specific type orders were very limited and demand was likely to continue, unless supply increased.
“It’s a case of supply and demand. If the selection increased the price might drop down a little bit.
“Due to the slow market, people are trying to lower their costs thus the demand for coarser wool increased, and this has been benefitting the crossbred types,” he said.
“As to 25.5 micron, it can be for both weaving and knitting of spring and winter collections, so, there will be year-round demand, but this is a very specific type.”
Positive signs at finer end in Sydney
Mr Plunkett said there were some positive signs at the finer edge, especially in Sydney where the 17 and 17.5 MPGs managed to gain some ground.
“It was the final designated Australian Superfine (AS) sale for the season in that selling centre and support was still noticeable for selected types.
“The more stylish types (spinners and best style, 40 Newtons/kilotex) maintained significant premiums over lower spec types although quantity was reduced when compared to previous AS auctions.”
Mr Plunkett said buyers also showed support for the Fremantle market lifted 5-10 cents for the week, including an encouraging increase on the final day.
Merino skirtings generally tracked sideways for the week, closing at similar rates to last sale, he said.
“Merino cardings also finished on the positive side of the ledger with Sydney and Fremantle both gaining ground.
“Volumes over the coming few weeks are forecast to remain steady with approximately 45,000 bales expected in each of the next three weeks.”
Sources: AWEX, Chinatex
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