AWN auctioner Kelvin Shelley, left, with Len, Ruth and Geoff Menzel at the Melbourne wool sale on Wednesday.

Better quality sound and clean fine Merino wool continued to sell for premiums to European interests this week, despite prices generally losing momentum across Australia.

Despite the dollar hitting a five-month low of US91 cents on Thursday, the AWEX Eastern Market Indicator closed the week on 1022 c/kg, down three cents.

However, AWEX said the best style-average spinners types around 40Newtons/kilotex tensile strength were well supported in the 18-microns and finer range.

Europe-India, China market split

According to Techwool Trading managing director, Rod Franklin, there are two distinct areas of demand in the market, with the better finer Merino wools going to India and Europe, while the China types were “dragging the chain” on price by comparison. Though there was still plenty of demand for all types of Merino fleece from China.

Techwool Trading bought 3137 bales of Merino fleece this week, 17 percent of the offering, with about 70pc destined for China and the rest for India and Europe. The other big buyers of Merino fleece were Fox and Lillie Rural, 2379 bales, 12.9pc; PJ Morris, 1808 bales, 9.8pc and Tianyu, 1563 bales, 8.5pc.

The main cross buyers were Kathaytex (Vic), 778 bales, 18.4pc; Techwool TYrading, 768 bales, 18.pc; Fox and Lillie Rural, 505 bales, 11.9pc and Australian Merino Exports, 470 bales, 11.1pc.

China finance problem continuing

Mr Franklin said there was definitely a finance problem in China with the country’s tightening of monetary policy and this was contributing to the downturn in China type prices. The falling Australia dollar didn’t help, with the usual Chinese reaction being to reduce US prices, he said.

Australian Wool Network auctioneer Kelvin Shelley said competition was very good on Thursday in Melbourne, especially from European interests.

“If the Europeans weren’t active in the market on those wools, we probably would not have got the 30-40 cents premium we got in the market.”

European interests were very competitive for the sound 16-18.5 micron fleece wools, 38-40N/kt-plus, with low vegetable matter content – no more than 1.5pc – with the best premiums for under 1pc VM, he said.

Australian Wool Network and United Wool sell to Italy

AWN sold wool for Stonehaven’s Menzel family this week, with the 18.6-19.5 clip selling above valuation to Italian fabric maker Vitali Barberi Canonico, through the United Wool Company, Tottenham.

Classer and co-owner Geoff Menzel said though the wool market “had a long way to go”, the family’s 15 bales sold 60 cents above valuation. The top five-bale line from bought-in sheep at 18.6 microns, 55N/kt strength, 78mm length, 0.3pc VM and 76.3pc yield made 1199c/kg greasy. Another five bales of 18.7u, 45N/kt strength, 79mm length, 0.3pc VM and 77.7pc yield sold for 1197c/kg greasy.

AWEX reports stall in last week’s rally

AWEX said the rapid rise in the market last week failed to spark a longer lasting rally with brokers passing in 14 per cent of the 36,812 bale offering across the Sydney, Melbourne and Fremantle selling centres on Wednesday and Thursday. It was the smallest Sydney sale in four months.

The biggest drag on the market this week was the Merino sector which was quoted lower for nearly all microns, AWEX said. Falls of 10 cents in the Micron Price Guides were common and were up to  20 cents in Fremantle. Despite the overall negativity the superfine range gave some encouraging signs, AWEX said. Buyers were focused on the premium types, which continued to show some price-growth.

Focus on best style types came at a cost

However, the focus on the best style/average spinner and 40nkt types came at the expense of the lower spec types, AWEX said. Part-tender, high mid-break, and some of the lesser styles all lost ground, closing as much as 20 to 30 cents cheaper during the week. The fall in this lower-quality sector, which had found favour during the previous sale, saw a return to the large price differentials between these and the top tier types, AWEX said.

“Merino skirtings were surprisingly well supported given the losses in the lower-spec fleece category.

“The two sectors will, at times, move in unison as processing performance can be similar,” AWEX said.

Most skirting types closed ahead for the sale and selected lots sold above low-end fleece types. Crossbreds had varied results; increasing marginally at the small Sydney catalogue, and slightly lower at the larger Melbourne offering. Merino carding types generally closed in sellers favour, lifting by a few cents for the sale.

Sources: AWEX, Techwool Trading, AWN.