Markets

Premiums for sound fine and medium Merino wool keeps AWEX indicator up

Sheep Central, September 2, 2016

Wool sales Landmark1 MelbourneFINE and medium Merino wool prices lifted by up to 25c/kg clean in auction sales this week.

The AWEX Eastern Market Indicator closed up 11 cents to 1320c/kg clean, with brokers passing in 3.6 percent of the 40,553-bale offering in Sydney, Melbourne and Fremantle.

The EMI in US dollar terms finished just 1 cent down on US996 cents, as the $A-US exchange rate fell US0.68 cents during the week to 75.43 cents.

AWEX senior market analyst Lionel Plunkett said most of the wool catalogued was freshly shorn and had not been offered previously, a reflection of the recent buoyant market.

“The fleece market opened on the east coast to a stronger tone from the very first lot and continued to strengthen in all centres as the week progressed.

“All types and microns generally enjoyed gains of 10 to 20 cents on the back of a continual improvement in sentiment, with Fremantle posting rises of 20 to 25 cents, compared to their previous sale held a fortnight earlier.”

Mr Plunkett said the superfine range came under close scrutiny, particularly with Sydney hosting a designated superfine sale. The 16 to 18 micron ranges were well-represented by best style types and to a lesser extent average spinner styles, he said. A significant portion of the 16-18 micron range wools, and about 27pc of the otal offering, tested with a tensile strength greater than 40 Newtons/kilotex. About a third of the wool offered was declared as from non-mulesed sheep, from flocks which had ceased mulesing or from sheep mulesed with pain relief.

“These were met with strong competition and posted appreciable improvements over the two days as premiums of 200 cents emerged for selected lots over equivalent lower spec types.

“Although the focus was squarely on these better types, the strength also carried through into Good style and part-tender types,” he said.

The skirting market continued to perform very well on the back of the strong fleece market, Mr Plunkett said.

“Buyers have shown most interest for well-grown low vegetable matter content types — less than 3pc vm — which have emerged in greater numbers as a result of a favourable early growing season.”

Crossbred clips had mixed results, with weakness in the 30-32 micron range being overshadowed by good support for 25-28 microns, Mr Plunkett said. The oddment market, although solid, did not match the rises of the fleece and skirtings and closed at similar levels to last sale.

Market demand met pre-sale expectations

Australian Wool Innovation’s weekly market report said this week’s sales basically met pre-sale expectations, as a US dollar-driven market was predicted by all and sundry.

“Demand for the longer wools remains very keen, with reports suggesting overseas users are finding it somewhat problematic to get set for larger quantities from exporters to ensure supply at current rates,” the AWI report said.

“Enquiry for the longer crossbreds are also increasingly showing more intent, but the shorter wools and carding sector remain very much in the doldrums as manufacturers try to establish a buy-in price that will enable garment and product sales into the new winter season.

Whilst all of the Merino fleece types posted handy gains, it was the descriptions between 16 and 19 micron that came under most buying pressure,” AWI said.

AWI said the best top making to spinners types of between 16.5 and 18.5 micron, have had a price premium of 175 to 190c/kg clean since the opening in August. The 43,000 bales on offer next week will test the resilience of the market and a generally unchanged result is expected, AWI said.

Click here for the latest AWEX Micron Price Guides.

Sources: AWEX, AWI.

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