Wool Market Reports

Superfine Merino fleece leads auction wool price falls

Sheep Central, May 10, 2024

WOOL prices fell further in auctions this week – led by bigger falls in superfine Merino fleece values — sparking a slight increase in the percentage of bales passed-in by brokers.

The Australian Wool Exchange said the market has been unable to maintain the positive tone evident at the end of the previous series, recording losses this week, again heavily influenced by currency movement.

The national offering fell below 40,000 bales for the second consecutive selling series, with 38,476 bales on offer, of which just over 90 percent was sold, AWEX said. The bale passed-in rate lifted 0.7pc to 9.4pc.

“After the Australian dollar climbed above 66 US cents before the opening lot, losses were expected when the market opened.

“These expectations were realised from the first lot, and by the end of the first selling day the individual Micron Price Guides (MPGs) for Merino fleece had fallen by between 2 and 46 cents, across the three selling centres,” AWEX said.

“With downward movement in the other sectors, the AWEX Eastern Market Indicator was pushed down by 14 cents.

“Due to the strengthening of the Australian dollar when viewed in US dollar terms the market improved,” AWEX said.

“The EMI climbed by US6 cents.

“The second selling day the market settled somewhat, again heavily influenced by currency, as the Australian dollar eased before the start of the second day.”

AWEX said the Merino fleece MPG movements for day two ranged between minus 33 and plus 11 cents. The EMI dropped by a further 4 cents, while in USD terms the EMI lost 5 cents.

“The EMI closed the week at 1134 cents, a fall of 18 cents.

“In USD terms, the EMI rose by the barest of margins, closing one cent higher at US746 cents.”

AWEX said after rising for five consecutive selling days, the EMI has since gone on a five selling day downward run, losing a total of 43 cents across these sales, a drop of 3.7pc.

Lack of buyer participation not the issue – AWI

Australian Wool Innovation trade consultant Scott Carmody said this week’s Australian wool auctions produced local returns that were undermined by a stronger Australian in our foreign exchange rates rather than a lack of participation by the usual buyers.

“The general 20c/kg clean falls resulted in slightly higher passed-in rates as some seller resistance emerged.

“By and large though, the wool growing fraternity chose to continue the season long trend of offering with a strong intent to sell,” he said.

Mr Carmody said Chinese interests continue to support the market similarly as evidenced by the largely unchanged eastern indicators (EMI) in US dollars and Chinese yuan.

“It is interesting to note the small improvement (+5usc) in the US dollar Western Australian market indicator (WMI) as this is largely (98pc) a dominant Merino wool producing state and selling centre.”

Mr Carmody said at the opening of auction sales for the week, buyers were extremely cautious, but once the almost immediate falls adjusted by currency came into play, the willingness to buy became evident.

“The top three Chinese top makers’ sale room representatives clashed heavily with the second largest local trader within the Merino sector.

“The largest trading operator was not as keen as usual, but still kept in contact with the market,” he said.

“What has become noticeable is the lack of regular buying and competition for our super fine Merino sector of finer than 18 micron.

“Prices were again very lethargic in that area,” Mr Carmody said.

“The lack of interest from Europe and India is the obvious missing ingredient at present for healthier sale results for superfine wool, but the production is also getting to be a larger percentage of the clip.

“So far this season, wool finer than 18.5micron is 34.2pc of the entire wool tested during 2023/24.”

Mr Carmody said the fine and medium wool Merino sectors (19 to 22micron) were again the most sought of wools and in local terms fell away 15 cents. The broader than 20.5 micron wools were the least affected for price of wool types, but part of this is certainly supply driven as the 20.5-23.5micron Merino wool sector now accounts for just 11.8pc of all Australian production so far this season.

Next week’s offering is again expected to be below 40,000 bales. There are currently 39.420 bales on offer in Sydney, Melbourne and Fremantle.

Click here to see the latest Micron Price Guides.

Sources – AWEX – AWI.


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