AUSTRALIAN wool prices took a turn for the better this week, led by 19-22 micron Merino types and fleece free of vegetable fault generally.
The Australian Wool Exchange said after two successive weeks of losses and three without an overall increase, the auction market recorded an overall rise in this series.
“All three centres opened on Wednesday, to accommodate the Anzac Day Public Holiday on Tuesday.
“The national offering reduced after last week’s sizeable sale and there were 38,505 bales available to the trade, 14,446 fewer bales than the previous sale,” AWEX said.
“With vegetable matter (VM) levels rising as the calendar year progresses, wool carrying less than 1 percent vm became hot property, as these types become less available.
“Strong buyer interest in these FNF (free or nearly free) types were the driving force in the increases across the Individual Micron Price Guides (MPGs) for Merino fleece, whose movements in Sydney and Melbourne ranged between unchanged and +55 cents,” AWEX said.
AWEX said the crossbred and skirting markets in the east recorded very little change for the week, while the oddments eased slightly.
The net result was a 13-cent increase in the AWEX Eastern Market Indicator, that closed at 1302 cents/kg clean.
“For the second week in a row the Western region had a robust performance.
“In Fremantle the Merino fleece MPGs added between 22 and 60 cents, these gains helped to push the Western Market Indicator up by 30 cents, with again only mediocre results in the skirtings and oddment markets preventing a larger increase,” AWEX said.
“Although often remarked on, currency must again be mentioned, as it has again played an influential role in this series.
“As the Australian dollar fell by nearly a full cent compared to the US dollar, when viewed in US terms, the EMI fell,” AWEX said.
“The EMI lost 3 US cents, closing the week at US860 cents.”
New China-based business underpins demand – AWI
Australian Wool Innovation trade consultant Scott Carmody said a steady start to the auction week was seen, with the only positivity arising from the lower value AUD against the US dollar.
“This forex gain saw prices basically just hold in local currency value, but still falling in USD price levels.
“The smaller offered volumes due to the shortened selling week also assisted in prices not degrading much at all,” he said.
“A dominant buying display from Chinese indent operators occurred on the first day, perhaps signalling what was to follow the next day.
“Pre-sale, the exporters had reported a better interest for skirting types, but still subdued demand for fleece wools of all microns,” Mr Carmody said.
“Cardings remained a no-go zone for most with just the odd contract written each week and crossbred wool types were not very well sought, with just the lowest prices offered turned into business as that low price became irresistible to some.
“By mid-week though the overnight trading books had bounced significantly for the better.”
Mr Carmody said the keener enquiry grew to be converted into firm sales, which were quickly asked for repeats which took some by surprise that request for orders had been so readily turned into written contracts.
“By Friday (today) most traders had seen enough to see their exposed offered prices reach much higher levels, and some of which had been snapped up.
“This was mainly Chinese-based new business and exporters report stocks on hand had reduced considerably.”
Mr Carmody said the final day of auction sales on Thursday saw a strong rebound in AUD price levels as some buyers had pre-empted or assessed the better selling opportunities that were to eventually come.
“Apart from carding wools, all types and descriptions enjoyed strong value gains of between 20 to 30 cents, and some individual types such as the 20 to 22 micron wools, shot up 50 cents for the day.
“Strong export trader buying took place and knocked the Chinese indents out of the market for the time being.”
Next week’s offering is forecast to rise and although three selling days are available, only two are needed, AWEX said. There are currently 44,257 bales on offer.
Click here to read the latest AWEX Micron Price Guides.
Sources – AWEX, AWI.
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