SPORADIC low volume demand from China has underpinned a third overall consecutive weekly loss in the Australian wool auction market.

However, the Australian Wool Exchange said there were positive signs toward the end of the week and some small positive movements within individual microns and types.

After 9.6 percent of the total national offering was withdrawn prior to sale there was a total of 31,095 bales available to the trade, AWEX said. This was 7,928 fewer bales than in the previous week, but brokers passed in 14.1 percent.

The total volume offered this season is now only 9,000 bales higher than the same time last year, a small 1.4pc increase.

“The largest losses were again felt on finer merino fleece types in the eastern centres,” AWEX said.

“This was reflected in the individual Micron Prices Guides (MPGs) in Sydney and Melbourne, which for 18 micron and finer fell by between 33 and 91 cents.

“All other Merino fleece MPGs ranged from -3 to -22 cents.”

AWEX reported its Eastern Market Indicator (EMI) fell by 20 cents for the auction series, closing at 1241 cents/kg clean.

“After hitting its lowest point on record last week, the 30 micron MPG in the south was one of only two to record a positive movement for the series, albeit a marginal three-cent lift.

“The EMI is now 78 cents lower than the corresponding sale of the previous season, a drop of 5.9pc,” AWEX said.

“With the EMI slightly lower and the offering marginally higher, the total dollar amount of wool sold this season is currently sitting just above last year.

“There has been 835 million dollars’ worth of wool sold, just over 11 million more than the previous season,” AWEX said.

“Another positive for the series was the EMI when viewed in US$ terms.

“After the AU$ gained 1.3 cents compared to the US$, when viewed in US$ terms the EMI recorded an increase, adding US3 cents.

China demand sporadic and low volume – AWI

Australian Wool innovation trade consultant Scott Carmody said results at this week’s Australian wool auction sales were again largely determined by the relative inactivity of Australia largest customer, China.

“Demand at present from China is best described as sporadic in activity and low in volume, which is preventing any clear signals for local buyers to act on decisively.

“While this week did produce some fresh business from China, the impact on the local auction market was noticeable but negligible as a bit of price tightening and buying pressure was witnessed towards the close of selling, particularly those sale lots of better specifications,” Mr Carmody said.

“Indian and European purchasing interest and indent operations are helping to maintain and steer the market, but the ability of these destinations to absorb additional volume as China remains quiet is limited.

“As with the rest of the world, the non-Chinese manufacturers at all segments of the supply chain are being severely hampered in their operations by the lack of experienced staff being available and swiftly rising energy costs,’ Mr Carmody said.

“In fact, a few mills in Europe are strategizing whether it is actually financially better to reduce work shifts, even though demands on their manufacturing space at good price levels are readily available.”

Mr Carmody said almost all wool types and descriptions on offer this week suffered losses again, the magnitude was thankfully not as brutal as the past few sale weeks.

Some Italian and Indian orders did help the better super fine Merino fleece wools hold their values and by the close of selling, the lack of volume actually pushed these types 30ac dearer for the week, he said.

“Buying mainly came from trader’s books, with support from the Indian and Euro sourced indents.

“China top makers were interested, but all appeared to be concentrating on either Euro spec lots or “cheap” lots,” he said.

Next week’s offering increases for the Tuesday and Wednesday sales. Currently, there is expected to be 36,941 bales on offer.

Click here to see the latest AWEX Micron Price Guides.