Wool Market Reports

Merino wool prices drop for fourth consecutive week at auctions

Sheep Central, February 9, 2024

AUSTRALIA’S auction wool market continued its gradual decline this week, recording its fourth consecutive weekly drop; however, positive signs were shown late in the selling pattern.

AWEX said after 8.1 percent of the offering was withdrawn prior to sale, 38,811 bales were offered, 5912 more than last week, but brokers passed in 9.8pc.

“Buyer demand was still strong, but in a similar pattern to the previous series; the prices on offer were again below those available in the previous series,” AWEX said.

“Wool possessing favourable additional measurement results, particularly those with low CVH readings (a measurement of wool length consistency) held up best in the softer market.

“The movements in individual Micron Price Guides (MPGs) for Merino fleece across the country ranged between +1 and -34 cents,” AWEX said.

“The skirtings tracked the fleece, while the crossbred and oddment sectors again defied the overall trend recording small increases.”

The AWEX Eastern Market Indicator lost 8 cents, closing the week at 1163 cents/kg clean.

“The EMI has now not recorded a positive movement in eleven consecutive selling days.

“This run further surpasses the eight sales that the EMI dropped in May 2023, although the losses sustained this time around have not been as severe,” AWEX said.

“Over the previous eleven selling days the EMI has lost a total of 57 cents.

“Over the eight consecutive negative selling days in 2023 the EMI dropped by 103 cents,” AWEX said.

“The last time the EMI has had a longer run without a positive result was back between August and October 2022, when the EMI fell for twelve consecutive selling days.”

Chinese New Year holiday impacts market – AWI

Australian Wool Innovation trade consultant Scott Carmody said sluggish demand continues within the Merino wool sector, particularly for fine types less than 18.5 micron as European buying is subdued.

“Enquiry and business for all other types and descriptions in the crossbred and carding segments is relatively consistent without being overly abundant for orders.

“These wools are very much price sensitive as use of these wools and prices slowly recover towards their normal levels,” he said.

Mr Carmody said with Chinese New Year upon us, many factories have decided to completely shut down for a week — or two in some instances — which has seen some key players absent from operations.

The official period is known as the Spring Festival holiday and runs this year from the 7th to 16th of February. The Chinese Spring Festival is the most important traditional festival and it has become a time very similar to the Australian Christmas/New Year period where Australian business largely shut operations to allow staff time off.

Mr Carmody said Australian-based exporters dominated the buyer lists at auctions with the larger Chinese top makers and indents playing a limited supporting role only.

“Some premium buying from Italy appeared on very specific clips exhibiting exceptional quality, style and higher curvature readings in wools finer than 19 microns.

“Only the very best received this support, but premiums were high ranging from 300 to 450 cents above a standard type of similar micron.”

“Prices this week for the 18.5 micron and broader Merino wools held on rather well but were still 5 to 10 cents lower by week’s end.

“This result was again assisted by the forex of the AUD against the USD falling 0.7pc.

“Types finer than 18.5 micron drifted throughout, and most quotes were a general 25 cents lower by the close of selling,” he said.

Cardings and crossbred wool types sold under a much more competitive environment and small gains were made daily to see closing basis 5/10 cents higher for the week.

Next week the bale offering is expected to rise. There are currently 43,624 bales rostered for sale nationally and Melbourne will require three selling days to accommodate this.

Click here to see the latest AWEX Micron Price Guides.

Sources – AWEX, AWI.

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