WESTERN Australian wool brokers withdrew more than half the bales catalogued for auction sale this week as the national market recorded its sharpest weekly adjustment this season.

The Australian Wool Exchange said the western indicator dropped by 90 cents this week, the largest fall since 4 August 2020 when the indicator dropped by 123 cents.

“The passed-in rate in Fremantle (this week) was 51.3 percent, this was the highest passed-in rate in the western region since 17th August 2021,” AWEX said.

The national passed-in rate more than doubled to 27pc as brokers withdraw bales from sale – the highest withdrawal rate since May 2023, but still below the highest recorded of 56.5pc in 2003.

AWEX said the wool market has suffered large falls this week, with all sectors of the market recording losses.

“In the eastern centres the Micron Price Guides (MPG) movements in Merino fleece lost between 33 and 86 cents.

“The benchmark Eastern Market Indicator (EMI) lost 62 cents.”

AWEX said the EMI has fallen for 12 of the last 14 selling days, losing 170 cents across this run.

“There was strong seller resistance to the lower prices on offer pushing the national passed-in rate up to 27pc, 13.4pc higher than the previous series and the largest passed-in rate since May, 2023.

“In the west, it was a similar pattern to the previous series, as the Fremantle region did not experience the falls in the Eastern centres on Wednesday last week here the falls were greater.

“The MPGs lost between 69 and 117 cents.”

AWEX said the broader microns have recorded larger falls again recently, widening the gap between the finer and broader microns.

“In the southern region, the difference between an 18 and 21 MPG is now 632 cents.

“This is compared to 193 cents at the beginning of the calendar year.”

AWEX said the carding market was the best performing sector this week, although losses were still recorded.

“General falls in locks, stains and crutchings of between 20 and 40 cents pushed the three carding indicators down by an average of 33 cents.

“The crossbred sector also recorded large falls, following Merino fleece types.”

The price reductions in these types contributed to the overall drop in the EMI, AWEX said.

Renewed demand need for sustainable price recovery – AWI

Australian Wool Innovation said despite the price correction this week, the EMI remains 310 cents, or 21.9pc, above the corresponding sale last year.

“The majority of the decline occurred on Tuesday, when the EMI lost 44 cents.

“Eastern Merino Micron categories generally fell 30–80 cents, while Fremantle recorded losses of up to 117 cents as prices adjusted to previous eastern movements and weakened further.”

AWI said seller resistance was particularly pronounced in the west, where more than two-thirds of Merino fleece was passed in.

“Better-style, well-measured fine wool continued to outperform lower-style, high vegetable matter and high mid-break descriptions.

“Standard Chinese top making wool bore the brunt of Tuesday’s decline,” AWI said.

“Processor competition increased on Wednesday as buyers sought to complete orders, with selected 17.5-18 micron better-style lots firm to dearer despite the generally weaker market.”

AWI said sellers continue to place a high value on their Merino fleece categories, where around one-third of the national offering was passed in compared with 27pc across the market overall.

“The particularly high pass-in rates for Merino fleece suggest many growers remain reluctant to accept the recent sharp price correction, particularly for better-quality clips, and are prepared to retain wool rather than meet buyers at current levels.

“This seller discipline may effectively reduce available supply if prices remain under pressure.”

AWI said underlying supply remains constrained with Australian-sourced offerings 13.1pc below last season.

“With around 28,400 bales forecast for next week, the combination of reduced supply and strong seller resistance may begin to moderate the correction, although renewed processor demand will be required for a more sustainable price recovery.”

Sources – AWEX, AWI.