AUSTRALIAN wool prices fell at auctions this week, after peaking at their highest point since June 2019 last week.

The Australian Wool Exchange said 42,278 bales were offered this week, 3198 fewer than last week.

“On the first day, from the opening lot in the eastern centres the market was on the decline and these losses continued through the day.

As Sydney and Fremantle did not suffer the falls recorded in the standalone Melbourne sale of Thursday last week, the largest falls were recorded in these centres.”

AWEX said the Micron Price Guides (MPGs) across the country for Merino fleece dropped by between 16 and 68 cents.

“The skirtings and crossbred sectors tracked on a similar path to the fleece, while the oddments managed a small average rise.

“The end result was 22-cent fall in the benchmark Eastern Market Indicator (EMI).”

AWEX said this was the largest daily drop in the EMI since the 28th of January.

“The second day the market continued on in a similar fashion.

“There were losses across all Merino fleece MPGs, and this time Fremantle selling last recorded the largest decreases.”

AWEX said the MPGs lost between 4 and 40 cents.

“With the skirtings and crossbreds also falling again, the EMI lost 10 cents for the day.”

AWEX said the EMI finished the week 32 cents lower, closing at 1751 cents/kg clean.

“This was the largest weekly fall in since October last year.”

AWEX said currency contributed to the falls in the market, but was not the major influence.

“When viewed in USD terms the market dropped by a similar rate.

“The EMI finished the series US26 cents lower, closing at 1246 cents.”

Interest remains for well-prepared low-risk wools – AWI

Australian Wool Innovation said the consistency of the falls across Merino fleece suggest a shift in buyer behaviour this week.

“Rather than selective weakness, the declines point to a broader pullback in bidding intensity.

“This follows a strong period of gains post the Chinese New Year break, with much of the recent purchasing still moving through the processing and manufacturing pipeline.”

AWI said the caution evident this week reflects tightening margins further down the supply chain, as exporters and processors adjust to higher input costs.

“Increased offerings have also reduced buyer urgency, contributing to softer price competition, while a firmer Australian dollar is adding further pressure to already constrained export margins.

“Despite the overall softer tone, buyer interest remained more evident for well-prepared, lower-risk types, highlighting a more selective approach to purchasing and continued underlying demand for quality,” AWI said.

“This week’s result appears to reflect the market testing short-term resistance and consolidating recent gains, rather than signalling a broader shift in underlying demand.

“The coming weeks of sales will look to provide clearer direction on the markets ability to absorb market conditions and break through current resistance.”

Next week’s offering is again expected to be over 40,000 bales. There are currently 40,909 bales on offer in Sydney, Melbourne and Fremantle.

Forward enquiry, but no trades

Indicative forward levels (c/kg).

Southern Aurora Markets’ Andrew Gooley said forward enquiry remains focused on finer Merino microns, particularly 18.5 to 21 micron, but activity was quiet this week. With no forward trades completed, attention will turn to whether demand steadies in next week’s larger offering.

Sources – AWI, AWEX, Southern Aurora Markets.