Wool Market Reports

Small wool market drop despite Chinese holiday slowdown

Sheep Central, February 16, 2024

AUSTRALIA’S wool auction market fell this week, but performed well considering the influence of the slowdown in trade due to the Chinese New Year period.

The Australian Wool Exchange said the market’s downward slide was halted later in the week with the AWEX Easter Market Indicator closing at 1157c/kg clean, down six cents, with brokers passing in 9.5 percent of the 40,472 bales offered.

“The market opened softly and by the end of the first day losses in fine Merino fleece types were the major factor in the overall market fall.

“The individual Micron Price Guides (MPGs) for 18.5 micron and finer fell by between 15 and 59 cents,” AWEX said.

“The AWEX Eastern Market Indicator (EMI) dropped 8 cents for the day, the twelfth consecutive selling day where the EMI did not manage an increase.”

AWEX said the second day of selling was mixed; however, buyer sentiment was stronger and increased as the day progressed.

“In the east, the Merino fleece MPG movements ranged between plus 20 and minus 25 cents.

“While in the west, which sold last, there were positive movements across the board of between 4 and 16 cents.”

AWEX said there was little change in the other sectors, so the overall movements were enough for the EMI to finally record an increase, albeit by the barest of margins.

“The one cent lift in the EMI was the first positive movement since the 9th of January, when the EMI added eight cents for the day.

“The positive tone evident, particularly late in the day, carried into the final day stand-alone Melbourne offering,” AWEX said.

“The southern MPGs all closed the day higher, the only blemish was the 21 micron MPG which fell by a single cent.

“As it was only Melbourne contributing to the EMI, the two-cent rise in the southern Indicator was enough to push the EMI up by one cent for the second successive day.”

AWEX said strong interest in the oddment sector helped to push prices higher for the third consecutive series. Next week the quantity is expected to rise again.

Lethargic demand expected – AWI

Australian Wool Innovation trade consultant Scott Carmody said the same trends were in place at this week’s Australian wool auctions, but glimmers of positive movements are starting to appear in the market analysis.

“The solo Melbourne sale at the end of the selling series saw a small but positive two-cent gain in that centre as well as a similar two-cent weekly gain in the 98 percent Merino supply Western Australian market.

“Local price levels were again assisted by the forex rates of the AUD against the USD falling 0.7pc.”

Mr Carmody said lethargic demand was expected, as Chinese customers of raw wool largely took the opportunity to have a week off work to celebrate their New Year period.

“One or two important auction operators failed to even place orders into the market, as they wished to rest their staff.

“Given the subsequent auction results, the market held on rather well as other mainly locally based buyers stepped up their purchases,” he said.

“The highlight of the week was largely the presentation of some excellent quality clips sold in Melbourne, but produced in Tasmania.

“The style and overall specifications were exceptional and in some cases the growers were justly rewarded by the prices received compared to the run of the mill type prices,” Mr Carmody said.

“Also significant for the week was the selling of the 1millionth bale for the 2023/24 season, which so far has seen around $1.40billion transacted through the auction system.”

Mr Carmody said Australian-based exporters dominated the buyers’ lists at auction, with the larger Chinese top makers and indents playing a limited to not supporting role only.

“Italy was strong on the very best superfine Tasmanian clips, but very selective still on many tested and visual appraisal specifications.”

There are currently 44,049 bales rostered for sale nationally, Melbourne again requiring three selling days.

Click here to see the latest AWEX Micron Price Guides.

Source – AWEX, AWI.

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