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Prices for wool under 19 microns drop in the eastern states’ auctions

by Sheep Central, 08 September 2017

PRICES for wool under 19 micron dipped on Australia’s eastern states’ auction floors this week and the benchmark AWEX Eastern Market Indicator closing slightly lower.

AWEX senior market analyst Lionel Plunkett said after the tumultuous rises and falls of recent sales, the auction market had a more subdued week.

“The market opened on Wednesday with prices quickly finding a level, a level that was bringing prices very similar to those achieved at the previous sale.

“Generally, prices were trading within 5 to 10 cents of last Thursday’s quotes, with some types slightly dearer and others slightly easier,” he said.

“The only types to make any significant movements were 18.5 micron and finer lesser style wools, which were up to 20 cents easier.”

Mr Plunkett said the AWEX EMI lost a single cent to finish the day at 1557 cents, although it did record a 13-cent lift when viewed in US dollar terms.

“The second day was an almost carbon copy of the first.

“The market again sold at levels very close to those achieved on the previous day, apart from 18.5 micron and finer, with these types generally falling a further 20 cents,” he said.

“The EMI again lost a solitary cent, closing the week at 1556 cents, an overall reduction of just two cents.

“It must be noted, that the Fremantle market experienced larger falls than the East, generally 20 to 40 cents, with 18.5 and finer also most-affected.”

Mr Plunkett said the skirting market followed a similar path to the fleece.

“The finer lesser style wools and those carrying excessive vegetable matter recorded general losses of 10 to 20 cents.

“The broader, better style FNF wools  increased in price by around 15 to 20 cents,” he said.

The crossbred market also realised prices very close to those achieved the previous week, with the exception being 26 micron fleece, which was 15 cents dearer.

Mr Plunkett said the carding market received excellent support this week and reversed its recent trend of downward movement.

“Most types and descriptions appreciated by 5 to 10 cents.

“Quantities continue to rise, next week there is currently 44,281 bales rostered for sale in Sydney, Melbourne and Fremantle.”

Strong Italian and Chinese orders underpin market

Australian Wool Innovation’s weekly market report said values for the best superfine types could not be sustained at the extremely good levels that were extracted from the Sydney designated super fine sale of last week.

“Competition was softer from the outset, and while the Italian orders remained in place, the trader interests was far less urgent and so prices drifted downward by 20 to 30ac on each of the sale days.

“Even so, the premiums above the normal run of the mill types remain substantial and well worth the additional preparation efforts.”

AWI said the benign local markets somewhat masked further buying interest from overseas.

“While European and Indian business was described as being sporadic, consistent enquiry emanating from Chinese interests provided many opportunities for those exporters in a position to be able to take on further orders.

“This week was notable for the seemingly price sensitive nature of any new business, with the worsening currency in regards to US$ rates being somewhat problematic for exporters getting full market rates for new wool contracts.”

AWI said forward sales and some new business being written, combined with the ever-present and strong Italian and Chinese indent orders, should hopefully see prices basically hold their levels as the peak volume period of Australian production gets into full swing.

“Obviously some variances in individual types and descriptions will occur, but most of those directly involved in trade are optimistic about the immediate prospects of Australian wool.”

Source: AWEX, AWI.

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