IMPROVED competition from China lifted Australian wool prices this week and a bale of ultrafine fleece sold for 15,000c/kg – the highest auction price in the nation for more than six years.
The Australian Wool Exchange said talk amongst the trade early in the week was that the market could be up to 50 cents dearer when it opened.
“This talk came to fruition from the first hammer of the series.
“Spirited bidding from a wide range of exporters helped to push prices sharply higher, this intense competition was maintained all the way to the final lot in the western market,” AWEX said.
“By the end of the day, the individual Micron Price Guides (MPGs) in the Merino fleece types had risen by between 37 and 90 cents.
“These rises combined with overall gains in the other sectors, helped to push the AWEX Eastern Market Indicator (EMI) up by 50 cents,” AWEX said.
“This was the largest daily rise in the EMI for the 2021/22 selling season and the largest rise since January.”
AWEX said the intensity of the first day could not be sustained into the second, resulting in a more subdued buying approach throughout the final day.
“Some prices eased slightly as buyers became more cautious with their purchases, while some various microns continued to strengthen.
“This was reflected in the Merino fleece MPGs across the country, which ranged between -27 and +15 cents for the final day,” AWEX said.
“The EMI lost 4 cents for the day, closing the week at 1,369 cents, an overall gain of 46 cents for the series.”
Schneider Australia pays 15,000c/kg for 12.1 micron bale
A notable event of the series was a single bale of 12.1 micron fleece wool sold through AWN that achieved a price of 15,000 c/kg greasy in Sydney on Tuesday. This was by far the highest price of the current season and the highest price achieved nationally in more than six years, AWEX said.
The record-priced bale was among 21 bales of paddock-grown Responsible Wool Standard-certified non-mulesed fleece wool bought by Schneider Australia from New England producers Europambella. The bale weighed 178kgs giving it a greasy gross value of about $26,700.
AWEX said the higher prices achieved this week have enticed more sellers to the market, pushing next week’s national offering higher. 45,755 bales are currently expected to be offered in Sydney, Melbourne and Fremantle.
Demand out of China was largely responsible – AWI
Australian Wool Innovation trade consultant Scott Carmody said the price gains this week were widely expected and those thoughts were transmitted throughout the trade pre-sale.
“Perhaps the Merino fleece spiking to initial 80-cent gains took many by surprise, but almost all buyers remained active in the market despite the magnitude of those price gains.
“Towards the end of the first day’s selling there appeared to be a lull as buyers assessed the speed and extent of price rises,” he said.
“A price retraction and consolidation on the final day greeted buyers and that softening remained in play for most of selling.
“Towards the end of the auctions those price degradations were largely recovered and prices were almost back to the previous day’s closing levels as competition ramped up once more as buyers looked to cover off risk and exposure,” Mr Carmody said.
“Demand out of China was largely responsible for this week’s activity.
“From the close of selling last week, exporters were fielding increasingly higher bids from that country,” he said.
“The volume of new business took most immediate stocks available and therefore forward exposure had to be considered to take on more quantity of forwards that were on offer.
“As exporters rejected bids the clients improved their bid levels trying to entice lock ins,’ Mr Carmody said.
“A range of US35-cent improvement was flagged and subsequent auction gains far exceeded.”