RENEWED demand for crossbred wool bound for fake fur garments has helped lift the 25-28 micron categories into record territory.
The crossbred sector made the biggest gains of all micron ranges this week – from 50-150c/kg clean as the benchmark AWEX Eastern Market Indicator rose 21 cents to 1846c/kg clean.
Brokers passed in just 3.6 percent of the 42,621 bales offered, which was 3016 more than last week’s offering. The EMI in $US terms fell 27 cents to US 1398c/kg clean, with the $A-US exchange rate at US75.73 cents.
Techwool Trading export trade manager Evan Croake said some crossbred buyers were looking for cheaper product at a price point that was easier to pass onto customers.
“But also just lately the demand for fake fur (from China) has started again and it does look like this year that it will be using a little bit more crossbred wool than it has in previous years, probably purely because of price.
“I think they are going to target those cheaper wools because are going to allow them to make the price work.”
Mr Croake said the “biggest movers” have been the 24-27 micron wools with buyers looking for cheaper product and also more demand from India, especially in the 24-26 micron range.
“People are also starting to oversell the top on that coarser edge; there is very very little stock in the pipeline, similar to Merino, but I would say on the crossbred there just doesn’t seem to be much around at all.”
Mr Croake said the renewed crossbred demand has also helped clear brokers’ stocks of 32 micron-plus wools, especially lines in the 32-35 micron range.
Fox and Lillie brokerage manager Eamon Timms said there was a mountain of crossbred wool on the market between Christmas and Easter and now that is drying up a fair bit.
“There is not much volume around and there is some business being done and people need it.
“It is really more of a reflection of the big drop in volumes of crossbred compared to only just a few weeks ago.”
Mr Timms said some fine crossbred wools are also being bought to blend with Merino lines due to the difficulty in finding 22-23 micron lines at auction with the drought affecting pastoral areas.
“So they are buying finer crossbred and then some comeback wools, which is a particular factor driving the fine edge of the crossbreds.”
Australian wool market trends upward for third week
AWEX senior market analyst Lionel Plunkett said despite the national auction selection this week again consisting of a large number of poorer style and lower yielding wools, buyer sentiment remained very high as lack of supply in the coming months continues to be a concern.
He said on the first day of selling on Tuesday, aggressive buying pushed prices higher and the EMI rose by 22 cents, finishing the day at 1847 cents, easily surpassing the previous record of 1834 cents set in February of this year.
“On the second day of selling (on Thursday), buyers became more selective in their purchases, pushing prices down.”
Despite the fall in the price of Merino wool, the EMI only lost 1 cent, mainly due to the steep rise of the crossbred sector, Mr Plunkett said.
“Interestingly, despite the overall increase in prices, due to currency movements, when viewed in $US terms, buyers’ purchases were actually cheaper for the week.”
Mr Plunkett said the skirtings also managed rises of between 20 and 40 cents this week.
“Wools carrying less than 3pc vegetable matter and those with favourable additional measurement results, recorded the largest gains.”
Crossbreds continue to rise
The crossbred sector continued its upward rise, posting its fourth consecutive weekly increase, with 25-30 micron wools selling 50 to 150 cents above those achieved at the previous sale.
“The large increases pushed the Micron Price Guides for 25, 26 and 28 microns into record territory,” Mr Plunkett said.
The oddment market rose for the fifth consecutive trading week. All types and descriptions generally sold at levels 5 to 10 cents above those achieved at the previous sale, wools finer than 18.0 micron most affected.
Merino wool quality causing price anomalies – AWI
Australian Wool Innovation’s weekly market report said within the Merino sector, a substantially weaker Australian dollar masked some weakness of demand for the current deteriorating quality of wool on offer due to adverse seasonal conditions across the nation. The EMI level is 23pc or 345 cents higher than at the same sale week of last year.
“Significantly this has occurred when we have had over 50,000 more bales sold through auction than at the same period last year.
“In the Merino segment of the auction offering, the general lowering of recent wool quality is increasingly causing many price anomalies,” AWI said.
“Price discovery is now wildly erratic with yield, staple length and nkt (strength) becoming growing factors in price determination, on top of the season long factors of fibre diameter, poBm (position of break Middle) and co-efficient of variation hauteur, making for more complicated batch finalizations for exporters.
“As such, some very large variation in sale results for wools of similar micron and vm are now commonplace,” AWI said.
“The large majority of Merino price indicators of 16 to 21 micron were largely unchanged for the week but within those variations of plus or minus 40 cents were individually changed dependent on quality.”
AWI said strong, but irregular interest due to quality is expected to continue next week with another 43,000 bales scheduled to sell.
Click here for the latest AWEX Micron Price Guides.
Sources: AWEX, AWI.