MERINO and crossbred wool prices improved at Australian auctions this week as confidence builds heading into the Christmas recess.
AWI trade consultant Scott Carmody said buyers showed good interest on all sale lots, irrespective of quality.
“Larger percentage price gains were extracted at the extreme ends of the selection with both super fine Merino wools and crossbred wool types benefitting the greatest in a strong and spirited week of auction activity.”
The Australian Wool Exchange said this week was the final buying opportunity for exporters trying to fill and ship December orders.
“This put pressure on many types, as a number of exporters fought hard to finish their respective orders.
“Finer Merino fleece types attracted strong buyer attention, as a result these wools recorded strong rises for the series,” AWEX said.
“This was reflected in the MPGs across the country for 18.5 micron and finer, which added between 22 and 41 cents.
“These gains combined with solid lifts in all other sectors, helped to push the AWEX Eastern Market Indicator (EMI) up by 14 cents for the series, the EMI closed at 1360 cents/kg, a 1pc increase.”
AWEX said the EMI has now risen for four consecutive series, adding a total of 41 cents during this period.
“Although the Australian Dollar (AUD) lost further ground against the US$ (The A$ traded 0.29 cents lower compared to the previous week), when viewed in US$ terms, the EMI also recorded an increase.
“The EMI added US6 cents for the series, closing at US971 cents, a 0.6pc increase.”
AWEX said the crossbred sector was the best performing in percentage terms, particularly in the south.
“In Melbourne the MPGs for 26 micron rose by 31 cents (+4.3pc), 28 micron by 25 cents (+6.3pc) and 30 micron by 25 cents (+7.5pc).
Mr Carmody said pre-sale thoughts from the trade pointed to a stronger market, but this was mainly on the back of the weaker A$ making wool cheaper in US$.
“Overseas buyers were looking to lock in some quantity for future delivery as most pre-Chinese New Year deliveries have been made.
“Some pockets of new business was available, but once again at very price sensitive levels,” he said.
“The inability to ship prompt prevented exporters taking on too much forward volume or risk, and any fresh purchases locally would be held at their cost for an additional two/three weeks for both storage and interest.”
Mr Carmody said China’s first stage manufacturers were again at the forefront of buying, but Australia’s largest trader showed a more willing purchasing intent and applied much stronger competition to the market, particularly on the final day of selling.
“European top making interest was apparent on many types but purchasing was most evident on the crossbred wools.
“The odd sub-continent order was operational but more-so towards the better specified lots.”
Next week is the final sale of this calendar year and the last before the annual three-week Christmas recess. As the last selling opportunity before Christmas, the national offering has increased and 42,306 bales are currently expected to be offered in Sydney, Melbourne and Fremantle.
Click here to see the AWEX Micron Price Guides.