RENEWED European interest in quality superfine wool and Chinese demand for medium Merino lines with lower vegetable matter content pushed prices generally higher this week.
The AWEX Easter Market Indicator rose 28 cents to 1506c/kg clean, with brokers passing in 6.3 percent of the 28,585-bale offering as buyer confidence returned.
AWEX senior market analyst Lionel Plunkett said the positive tone of the final selling day last week was evident from the outset this week.
“A relatively small offering of just 28,585 bales saw buyers having to fight hard to obtain market share.
“This, combined with the strong buyer sentiment, provided perfect conditions for a rising market.”
On the first day this week, all types and descriptions generally rose 20-30 cents, pushing the benchmark Eastern Market Indicator (EMI) up 10 cents to 1488 cents.
“Fremantle had more significant rises of 40 to 60 cents, as they realised the gains achieved in the previous week.”
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On the second selling day this week, the aggressive buyer sentiment resumed from the first lot, Mr Plunkett said.
“Prices lifted by a solid 10 to 20 cents from the opening hammer, then slowly but noticeably increased as the sale progressed.
“By the end of the sale, the price increases were generally 30 to 50 cents, pushing the EMI a further 18 cents to close the week at 1506 cents.”
Mr Plunkett said wools broader than 21 micron were most affected by the rising market, so much so that the Micron Price Guide for 22 micron hit a record high.”
He said the skirting market experienced rises, but nowhere near the extent of the fleece.
“Buyers continued to focus on the lower vm wools and lots exhibiting excellent length and strength results, trying to find reasonably priced wools in a continually rising market.”
Mr Plunkett said the crossbred wool market continued its solid run, with most types and descriptions this week generally rising 5-10 cents and 28 micron lines enjoying the largest gains.
The Australian Wool Innovation’s weekly market report said large gains in the 19-22 micron Merino fleece sector were the highlight of the selling week.
“In this area, the individual indicators gained 45-65c/kg clean, but masked within these figures were gains of well over 100c/kg clean.
“Of most interest to buyers were sale lots between 19 and 22.5 micron and 2-6pc vegetable matter content,” AWI said.
“With the vastly reduced offered volumes typical of this time of year, it took just two or three buyers to act aggressively and prices soared radically and landed these types in price territory completely in contradiction to the levels at which these types were sold or can currently be sold on.”
AWI said good gains were also recorded within the superfine under 18.5 micron Merino fleece descriptions.
“Although bidding was nowhere near as aggressive, competition was far more widespread with many buyers actively purchasing, but in a far more measured manner.
“The better types destined for Europe were upwards of 45 cents dearer, while the lesser categories moved a solid 15 to 30c/kg clean higher,”
“The average and inferior types also stabilised, found a level, and by week’s end were showing signs of a slight bounce upwards,” AWI said.
AWI said the Merino skirting chased sale lots with less than 6pc vm, gained around 25 cents.
“Interesting to note though is that those pieces and broken lines with jowls and heavier cott left in are receiving heavier and heavier discounts from most buyers.
“With values well over 1400 dollars per bale for good pieces, it is a timely reminder to class those skirting lines well where volume allows,” AWI said.
Next week, there will be a drop in bale quantity as the Fremantle market has another one-week recess, he said. There are currently 24,376 bales rostered for sale in Sydney and Melbourne.
Sources; AWI, AWEX.