Wool Market Reports

Wool market dips as only select lines sell better

Sheep Central, December 17, 2021

AUSTRALIAN wool prices improved for only selected lines in the last week of 2021 auctions, pushing the clip’s value to $1.132 billion for the year, a rise of $332 million.

Australian Wool Innovation trade consultant Scott Camody said exporters and traders were focussed on completing orders, but few were willing to increase stocks leading into Christmas with the shipping and storage issues involved.

The Australian Wool Exchange said after four consecutive overall rises, the market recorded a small overall loss in the benchmark Eastern Market Indicator.

“On the first selling day in the eastern centres, there were minimal price movements.

“This was reflected in the individual Merino fleece Micron Price Guides (MPGs) in Melbourne and Sydney which ranged between -11 and +1 cents for the day,” AWEX said.

“These fluctuations combined with minimal movements in the other sectors and pushed the AWEX Eastern Market Indicator (EMI) down by 3 cents for the day.

“In the west — selling last — the losses were larger, and the fleece MPGs in Fremantle dropped by between 19 and 25 cents,” AWEX said.

“The second selling day was more positive, with many MPGs recording positive movements.”

AWEX said across the country, the MPGs moved between -10 and +21 cents, with the west bouncing back from the previous day’s losses and recording the strongest overall gains.

“The EMI managed a one-cent increase for the day.

“The EMI closed the series at 1358 cents/kg clean, a drop of only 2 cents when compared to the previous series.”

AWEX said although the market recorded general overall losses, selected lots and microns recorded positive movements when compared to the previous series.

“This was due in part to strong buyer competition on selected lots, who were chasing specific wools to complete orders.

“The EMI began the 2021 calendar year at 1172 cents, then proceeded to gain 186 cents over the course of the year, an increase of 15.9 percent.”

The passed-in rate for the week was 13.7pc, a rise of 6.8pc on last week.

No change expected in the market – AWI

Mr Carmody said not many of the trade participants were expecting much change pre-sale this week and that is exactly what happened.

“The trade has predominantly been on a hand-to-mouth modus operandi and very few exporters/buyers were wanting to stock any potential incomplete batches and pay the holding charges over the recess.

“Shipping is also problematic and those two factors alone prevented any forced plays from both parties of the ownership exchange sides leading into Christmas,” he said.

“As such, the traders were heavily interested in completing full batches in order to meet those tougher shipping deadlines and topped the buyer’s lists throughout the selling week.

“The first stage processors were in the market, but were often out bid,” Mr Carmody said.

“The stability in wool trading/pricing over the past six weeks has been somewhat unusual against the wool market’s normally erratic pathways.

“In US$ EMI terms for example, the six-week range is US963-US972c/kg (0.9pc around the mean), but greater differentials occurred on the $A EMI, with a range of 1319-1360c/kg (3.1pc around the mean).”

Mr Carmody said since the beginning of the “new” season opening in early August, the market has retreated in both $US and $A, but only minorly.

“The local $A prices have gone just 1pc lower from 1372c to 1358c today and in $US from US1010c to US966c, which is a 4.4pc deterioration.

“Given most of the local exporters have reported “tough” trading conditions, and with retail consumer spending remaining difficult, these results can be looked at as being a positive outcome for the resilience of wool values,” he said.

The market now heads into the annual three-week Christmas recess. Sales will resume in the week starting on Monday the 10th of January.

Sources: AWEX, AWI.

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