Fine wools rule as record wool market holds firm despite exchange rates

Sheep Central January 20, 2017

Wool 14micron WooltradeApril2-15FINE wool prices held relatively firm in record territory yesterday, after the AWEX Eastern Market Indicator climbed to an all-time high of 1439 cents on Wednesday.

The AWEX Eastern Market Indicator finished the week up 12 cents on 1434c/kg clean, defying disadvantageous exchange rates in all the major trading currencies.

Brokers passed in 10.4 percent of the 56,077-bale offering as the $A-US exchange rates lifted to US75.22 cents and the EMI in US dollar climbed 17 cents to 1079 cents.

AWEX senior market analyst Lionel Plunkett said this week’s sales started strongly at the single-centre Melbourne sale on Tuesday, adding to the rises from the previous week.

“The finer microns outperformed the rest of the market, jumping by 40 to 50 cents; however there were softening signals showing in the broader microns where prices eased back slightly,” he said.

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On Wednesday the market strengthened further with Sydney and Fremantle sales, pushing the EMI to a record high.

“Melbourne lost more ground in the broader microns with a 5-cent dip, although the ultrafine microns sustained further increases.

“The rise in price of the finer microns and the falls in price of the medium and broad microns has seen the price differentials stretch out to more traditional levels, currently the gap between 18 to 21 microns is out to over 400 cents,” he said.

Mr Plunkett said although the Southern and Northern Market Indicators rose for the week, the Western Indicator fell by 22 cents.

“Selling last on Thursday, a predominantly medium to broad offering continued to deteriorate as the sale progressed, pushing some microns down by over 40 cents and in the final hour of selling there was evidence of a true falling market.”

Mr Plunkett said the skirting market again mirrored the fleece market, with the finer microns attracting excellent buyer support and recording increases in some fine microns of over 100 cents, while the medium to broad microns managed to just hold their ground.

“The crossbred market continues to struggle compared to the merino sector, prices were 5 to 40 cents lower than last week.

“All carding indicators rose again this week, pushing carding indicators in all three centres further into record territory,” he said.

Fine wools rule

Australian Wool Innovation’s weekly market report said the current strong demand for Merino types, and particularly the finer end, is ruling the overall market direction within the makeup of the EMI.

“Substantial wool top sales have apparently been made of the finer microns.

“This has depleted global stocks that have been held for some time and those top makers are now in a position to restock,” the AWI report said.

AWI said the frenzied buying witnessed last week was very much apparent this week, but much more type restricted.

“All Merino types finer than 19 micron sold to levels 50 to 90ac higher than the previous week’s close, but on the other hand, all wools broader than 19.5 micron showed signs of retreating.”

All of the crossbred selection had a mixed week where prices initially fell but then staged a semi recovery on the final day, AWI said. Price levels were par to 10ac cheaper for the week.

With 47,000 bales going to auction next week and given the slackening of the buying intensity and pressure seen on the final day of selling this week, a consolidation at best of the market is expected over the next two weeks, AWI said.

“Chinese interests all depart for the Chinese New Year holidays commencing January 28, so a more relaxed market environment is expected and gives other users a chance to buy in some inventory.”

Sources: AWEX and AWI.


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