INCREASED Chinese demand for Merino wool for the knitting trade has helped drive the Australian wool market higher this week.
The Australian Wool Exchange said the wool market has continued to trend upwards this week, recording solid overall price increases for the second consecutive auction series.
The rises in the Merino fleece Micron price Guides helped push the AWEX Eastern Market Indicator (EMI) up by 30 cents for the series — the largest weekly rise in the EMI since February.
The national offering increased to 47,446 bales, this was 7,044 bales more than the previous week, and brokers passed in just 6.4 percent of these.
AWEX said wool on hold continued to bolster offerings, due in part to this, when compared to the previous season there has been 104,242 more bales put through the auction system, an 8pc rise.
“The larger offering attracted excellent buyer support across all three selling days, pushing prices continually higher as the sales progressed.
“Main buyer interest continued to be focussed on the better style wools; however, lesser style lots also recorded price rises as buyers tried to find value in the rising market,” AWEX said.
“Unlike in the previous series, where the gains were felt mainly in the finer microns, this week the rises were experienced across all Merino types and descriptions.
“The individual Micron Price Guides (MPGS) across all three centres added between 15 and 88 cents for the week,” AWEX said.
The AWEX EMI closed the week at 1342 cents, an increase of 2.3pc.
“A strengthening in the Australian dollar — the A$ added US81 cents to climb to US77.89 cents this week — meant that when viewed in US$ terms, the rise in the EMI was even higher.
“The EMI added US34 cents, to close the series at US1045 c/kg clean, an increase of 3.3pc,” AWEX said.
AWEX said the skirtings also recorded solid price rises for the series, with general gains of between 50 and 80 cents, especially for 18 micron and finer lots.
Knitting trade strength continues
Fox and Lillie brokerage manager Eamon Timms said the market was benefiting mainly from Chinese orders with some business into Italy and India.
“This has just augmented what was good interest from China.”
Mr Timms attributed the Chinese demand to a contribution into processors’ interest in wool for knitwear, with shorter carding wools being particularly well priced in relation to fleece types.
“There is every indicator that the knitwear sector is still a really powerful consumer of wool volumes.”
Mr Timms said the price differential between carding wools and fleece wool is remaining “historically very tight.”
Next week’s offering is very similar, with currently 48,245 bales on offer in Sydney, Melbourne and Fremantle, and only two selling days required (Tuesday/Wednesday).
Click here to see the latest AWEX Micron Price Guides.
Sources: AWEX, Fox and Lillie.