Wool Market Reports

Wool auctions finish the week on higher note

Sheep Central, May 17, 2024

COMPETITION increased for later lots in wool auctions this week as buyers bid for limited offerings.

The Australian Wool Exchange said after two successive weeks of falls, the Australian wool market has recorded an overall increase this series, albeit by the barest of margins.

“The national offering was again below 40,000 bales for the third week in a row,” AWEX said.

“There was a total of 35,436 bales available to the trade, after 8.8 percent of the offering was withdrawn prior to sale.

“When compared to the previous season, the total amount offered continues to trend lower, “AWEX said.

“Season to date there has been 15,974 fewer bales offered, 1pc lower than the previous season.”

AWEX said the market movements were varied across the two selling days, within sectors and also within individual micron pockets.

“On the first day the movements in the individual Micron Price Guides (MPGs) for merino fleece ranged by between plus 18 and minus 10 cents, these movements combined with varied results in the crossbreds, skirtings and oddments resulted in a one cent fall in the AWEX Eastern Market Indicator (EMI).

“The second day was very similar to the first, but with a slightly more positive tone,” AWEX said.

“Here the Merino fleece MPG movements ranged between minus 3 and plus 22 cents, with 18 of the 26 published MPGs recording positive movements and only 3 falling.

“The EMI gained 2 cents for the day. By the end of the series the EMI closed one cent higher at 1135 cents/kg clean.”

AWEX said due to a stronger Australian dollar, the rise in the EMI when viewed in US dollar terms was better.

“The EMI added US9 cents across the series to close the week at US754 cents.”

Strong Chinese competition – AWI

Australian Wool Innovation trade consultant Scott Carmody said wool auctions produced results this week that haven’t been seen for some time.

“A stronger, small, rise in prices locally coincided with an Australian dollar strengthening by over 1pc against our major trading currencies.

“This saw all overseas buyers using US dollars or Chinese yuan having to pay that higher price to secure any sort of inventory this week, which they seemingly absorbed,” he said.

“The market opened solidly this week, but it was evident that some sort of pressure was being applied to certain market areas.

“The Melbourne and Fremantle markets initially sold to a firm unchanged scenario, but Sydney was as an outlier by selling 5 to 15 cents higher for almost the entire Merino offering,” he said.

“Cardings in all centres though faltered somewhat and drifted 10ac lower throughout the first day.

“Crossbreds at the finer end added a few cents but the broader end had prices 10ac lower by the end of that first day of selling,” Mr Carmody said.

“The second and final day of auctions though saw all selling centres producing dearer sale results across a high majority of wool types offered.

“Gains of between 5 to 10 cents/kg clean had been registered throughout the Merino, crossbred and carding sectors,” he said.

“Competition was the strongest at the close of selling as buyers pushed harder to buy in relatively smallish offerings available.

“The bulk Merino types aligned well in Melbourne and Fremantle by the end of the selling week, but Sydney remained a general 10ac higher.”

Mr Carmody said the Australian-based exporter traders stepped up their purchasing rates, mainly on the combing wools, but of all microns and Merino and crossbred alike.

“In sale room direct buying Chinese interests continue to support the market strongly, as did a strong offshore Chinese sourced indent.

“The strength of our largest buyer though continually out-bid those interests, despite the conversion cost of US dollars going against the local AUD and CIF pricing,” he said.

“Some buying from a European based manufacture was seen within the crossbred segment, as well as a slight increase of interest in price on super fine Merino, particularly in Sydney which saw lots sell 30 cents higher.”

Next week’s offering is again expected to be below 40,000 bales. There are currently 39,404 bales on offer in Sydney, Melbourne and Fremantle, which will sell over one day (Tuesday) due to the limited amount of wool on offer.

Click here to see the latest AWEX Micron Price Guides.

Sources – AWI, AWEX.

 

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