Wool Market Reports

Superfine wool leads the way in auction market lift

Sheep Central, December 8, 2023

THE Australian wool market lifted this week, driven by strong increases in fine Merino fleece types and aided by currency movements.

The Australian Wool Exchange said the national offering dropped by 1680 bales to 45,228 bales.

“Melbourne required three selling days, to accommodate the larger number of lots on offer this week.

“This was the first three-day sale in Melbourne since Week 46 (Thursday the 18th of May),” AWEX said.

“With only two selling weeks before the Christmas recess, exporters needing to finish orders knew that this sale was an important time to secure the wool they need, as the end of the year fast approaches.

“In the Merino fleece types, in many cases, wools possessing faults such as lower tensile strength or higher vegetable matter, brought very similar money to wool free of these faults, as buyers fought hard to secure certain lots that suited their specific needs,” AWEX said.

“The largest gains were recorded in the finest microns and strong widespread competition in these types helped to push prices higher.

“These gains were reflected in the individual Micron Price Guides (MPGs) for 18 micron and finer, which added between 14 and 71 cents,” AWEX said.

“All Merino fleece MPGs rose, with only the 19.5 micron MPG in the north bucking the trend, posting a 7-cent loss.

“The skirting sector tracked a similar path to the fleece, while the crossbred and oddment markets had an up and down series, where there was little overall change recorded.”

The AWEX Eastern Market Indicator rose by 11 cents for the auction series, closing the week at 1177 cents/kg clean.

Week 24 will host the final sale of the 2023 calendar year, with sales then heading into the annual three-week Christmas recess. As the last selling opportunity until early January, this sale is forecast to be larger. 50,550 bales are expected to be on offer in Sydney, Fremantle and Melbourne, which again requires three selling days.

China dominates on European types – AWI

Australian Wool Innovation trade consultant Scott Carmody said there was a general 25-cent gain across the entire Merino offering and the finer crossbred clips.

“Unfortunately, the broadest crossbreds and cardings failed to match the demand interest in the majority of wools for sale.”

Mr Carmody said some of the strongest competition seen for some time appeared within the superfine Merino fleece sector finer than 18.5micron.

“Closing quotes had the general run of the mill types at 50-70 cents dearer, but many specialists in this area had their quotes well over 100 cents dearer for the week.

“Interestingly, almost all of this new found buying intent came from the pressure that a few of the Chinese mills — mainly top makers and vertical (processors) — had been exerting on the market for the past two months.”

This meant China took a large proportion of clips into its inventory that have traditionally been the exclusive domain of European buyers for decades, he said.

“Many exporters commented that this week‘s beginning of market gains at the finer end of the Australian clip came as little surprise.

“The majority of operators in this area had been acutely aware of the good value of these wools trading under the 2000c/kg clean mark, but financial constraints and the largely negative demand signals from European users prevented most from taking advantage.”

Mr Carmody said the Australian dollar’s depreciation against the US dollar and the Chinese yuan was the strength behind the consistent 25-cent gains on the 18.5-25 micron type segments.

“The WA centre at Fremantle was most indicative of this as their AUD prices were almost spot on the CNY equivalent bid prices emanating from China.

“The closing levels across all three selling centres largely matched through the selection and illustrated the stronger trade demand, but also the price sensitivity that still remains in play,” he said.

Click here to see the latest AWEX Micron price Guides.

Sources – AWEX, AWI.

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