WOOL prices generally softened further this week, and especially for fine Merino clips, as retail demand traditionally slowed with the advent of the Northern Hemisphere, Australian Wool Innovation said.
However, finer crossbred clips and 21 micron-plus Merino clips with low vegetable matter content were well-supported and registered price increases.
AWEX senior market analyst Lionel Plunkett said although only 28,459 bales were offered this week, the benchmark Eastern Market Indicator fell for a fourth consecutive week, down 23 cents to 1472c/kg clean.
The EMI in US dollar terms closed US34 cents down to 108c/kg clean. Brokers passed in 12.2 percent of the bales offered. The average value of a 19 micron 185kg bales was $2155 and total weekly turnover was A$39.59 million.
“The last time the EMI rose was in Week 44 when it managed an impressive 43-cent rise.
“This sale saw price reductions from the outset, as buyers again looked for value in a falling market,” Mr Plunkett said.
“Best style lots exhibiting excellent test results continued to be in great demand and fared relatively well.
“However, wools showing even small impurities or slightly unfavourable length and strength results, were quickly discounted.”
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The finer the wool, the greater the price reduction
Mr Plunkett said the finer microns were most affected and, starting from 20 micron, the finer the wool, the greater the reduction in price.
“This resulted in general losses of between 60 to 80 cents in the finer Merino sector.”
A rare highlight of the week was the 21 micron and coarser types, which defied the downward trend and managed gains, generally between 10 and 15 cents, he said.
“The skirting market followed a very similar path to the fleece.
“Best style/low vm skirtings found good support and did not experience the same price reductions as the average style/higher vm lots, which were discounted by as much as 80 cents”
Mr Plunkett said the finer crossbred wools continued to find excellent trade support and were 5 to 10 cents dearer for the week.
“The 30 micron and coarser wools; however, struggled to garner the same support and were highly irregular.
“Again carding buyers had to fight for their share of a very limited offering. Most prices and descriptions were generally unchanged for the week.”
Market struggling to set autumn/winter pricing
Australian Wool Innovation’s weekly market report said despite Merino wool 19.5 micron and finer being most affected by the market softening this week, very stable market pricing was evident across all other wool types.
“With the Northern Hemisphere, and particularly China, hitting the traditionally slow retail demand period of early summer, the overseas manufacturers can afford a little wait-and-see approach.
“It appears the finest Merino types have taken the brunt of that slowdown,” AWI said.
Next week, the Fremantle region will have a one week recess and currently there are 25,278 bales rostered for sale, with selling in Sydney and Melbourne only.
AWI said some reports say the market is struggling to come to terms with a pricing strategy for the upcoming Northern Hemisphere autumn/winter, particularly for Merino wools finer than 19 micron as the prices are still at historically and relatively high levels.
“Manufacturing needs to increase productivity come August/September to cater for the key retail period late Autumn/Winter, so the next few weeks should see better buying interest and hopefully some stability return to the auction.”
Sources: AWEX, AWI.