AUSTRALIAN wool prices initially lifted at auctions early this week, but the market overall finished slightly down by the barest of margins, underpinned by improved crossbred values.

The Australian Wool Exchange said the national quantity was again small for this time of year, with just 29,323 bales available to the trade.

“On the first day of selling the movements in the individual Micron Price Guides (MPGs) for Merino fleece were varied, ranging from minus 10 to plus 37 cents.

“The skirting market was generally fully firm, with some selected specialty lots recording increases,” AWEX said.

AWEX said the crossbred sector recorded small gains, and the oddment market was generally unchanged.

“The result of these movements was a 4-cent rise in the benchmark AWEX Eastern Market Indicator (EMI).

“Due to a strengthening of the Australian dollar — the AUD added nearly a full cent compared to the US dollar since the close of last week’s sales — when viewed in USD terms, the overall increase was larger,” AWEX said.

“The EMI gained US13 cents for the day, the largest USD daily rise in the EMI since April.

“On the second day of selling, only Sydney and Melbourne were in operation and the market generally retracted.”

AWEX said the largest falls were in Merino fleece types, with the MPG movements ranging from plus 3 to minus 30 cents.

“There were minimal movements in the skirting and carding markets.

“The crossbreds recorded further positive results, preventing the EMI from a larger fall than the 5-cent drop recorded.”

AWEX said the EMI closed the week one cent lower at 1098 cents/kg clean, and with minimal currency movement before the final day, the EMI dropped by just one US cent for the second day.

In USD terms, the EMI finished the series US12 cents higher, closing at US743 cents, a 1.6pc increase.

Chinese wool buyers ‘price sensitive’ – AWI

Australian Wool Innovation trade consultant Scott Carmody said the story of the week’s sale results though was that wool prices expressed in the demand leading US dollar terms pushed 1.5pc when measured by the EMI.

“Whilst local sellers don’t get that advantage just yet, it does present an indication that for this week at least, our overseas users managed to find a few more us cents to buy wool.”

He said selling started off very keenly, with 5-10 cent gains across most types and descriptions.

“Exporters had reported a smattering of business available from predominantly Chinese interests, but again at very keen price levels and volume was not that large.

“All three selling centres operated on the Tuesday and the usually good sign of the last to finish selling for the day auction at Fremantle getting the most gains out of that renewed and slightly stronger buying interest.”

Mr Carmody said the first auction day certainly looked like buyers finishing off containers to correct specs for either shipments due, supplying risk aversion to new contracts or building containers to potentially off load during the Nanjing Wool market conference happening next week in Puyuan, China.

“The steam was taken out of the market overnight Tuesday, as enquiry dried up almost completely and conversion to new written contracts was near to nil.

“Overseas manufacturers and traders appeared to sit back to reassess the new price levels in both US dollar and Chinese yuan terms,” he said.

“This certainly spooked the spot markets on Wednesday as most wools reversed quickly back to the levels of the previous week’s close.”

Mr Carmody said Australia’s largest wool exporting entity, Techwool Trading, returned to the top of the Merino and cardings purchase lists this week.

“This activity certainly contributed to the better confidence of their competitors, whom sometimes look to that company’s actions to gauge direction.

“Competition from China’s top two top makers was evident and strong, but appeared to be more price sensitive than the trading operators,” he said.

Next week’s offering is expected to increase. There are currently 34,378 bales on offer in Sydney, Melbourne and Fremantle.

Click here to see the latest AWEX Micron Price Guides.

Sources – AWEX, AWI.