Wool prices hold at auction despite domestic logistics issues

Sheep Central, March 3, 2023

MERINO wool prices improved at auctions this week despite logistics issues affecting financing for some buyers.

The Australian Wool Exchange said 48,389 bales were offered for the week and 11 percent were passed.

“The recent surge in wool resulted in an overall February offering of 193,385 bales that was the largest monthly offering in 11 months and the largest February offering in eight years.

“Crossbreds contributed to the lift in volumes increasing to 25 percent of the January/February total (up from 21pc in the pre-Christmas period), but in line with the trend from previous years,” AWEX said.

The market handled the sizable offering effortlessly with the AWEX Eastern Market Indicator firming 4 cents for the week, closing at 1368c/kg clean, AWEX said.

“A weaker Australian dollar appeared to assist the overall result in local terms given the EMI eased 9 cents when converted to US currency.

“A staggered roster saw Melbourne and Fremantle open on a positive note on Tuesday with prices around 10 cents higher for Merino types,” AWEX said.

“Wednesday saw all three centres in action and the market movements varied with each location.

“Sydney had odd pockets of strength thanks to a designated superfine sale but was otherwise cheaper.”

AWEX said Melbourne was mostly dearer while Fremantle recorded only minor movements.

“The eastern-only final day closed out the week with a five-cent gain in the EMI after good support was recorded in Sydney on the back of a stylish superfine selection.”

Crossbred wools closed 10 cents lower for most microns after losing ground on the final day. Merino Cardings firmed slightly while Merino Skirtings made only minor movements for the sale.

Logistics issues hold up trading funds – AWI

Australian Wool Innovation trade consultant Scott Carmody said once again, pre-sale show floor discussions included high expectations of a very firm to dearer market.

“Business and enquiry was not huge in volume, but steady enough to inspire confidence.

“The Merino fleece prices rising a general 10/15c/kg clean validated those predictions, but all other sectors sold in a subdued environment and to the buyer’s favour for the week,” he said.

“This week’s sales featured the final designated super fine Merino sale of the season (in Sydney), but the offerings were very light in volume and quality of wool was not to the highest order.

“The few spinners and best top making clips on offer were extremely well sought by the two major Italian operators and price premiums were large,” Mr Carmody said.

“Those exporters paid 240 to 360c/kg clean above the general micron price guides, particularly for those individual sale lots with NM on the certificate.”

He said the market competition was weakened temporarily this week by local logistics problems surrounding the dumping and packing of containers.

“Delays in delivery from wharf and hence shipment, prevents letters of credit being executed which held up funds being returned to many of the buying/exporting companies.

“In this instance, it was believed tens of millions of dollars were held up.”

Mr Carmody said the auction competition was very much a week of trader dominant price setting and purchasing.

“The ability to trade relatively freely across all global destinations created positive sentiment which flowed right through to the close of selling.

“In fact, some of the stronger enquiry appeared at the end of the auction week.”

AWEX said the large sales continue into next week with over 51,333 bales forecast in three centres including another three-day Melbourne sale. A public holiday on Monday has resulted in Fremantle and Sydney holding auctions in a Wednesday/Thursday pattern.

Click here to see the latest AWEX Micron Price Guides.

Sources – AWEX, AWI.


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