WOOL prices rebounded this week with renewed demand for all qualities of Merino wool and recovery in broad crossbred rates.
AWEX senior market analyst Lionel Plunkett said the lesser types experienced the greatest gains as buyers attempted to find cheaper alternatives in a rapidly rising market.
The AWEX Eastern Market Indicator closed 24 cents higher on 1314c/kg clean, with the $A-US exchange rate on 74.83 cents and the EMI in $US terms 6 cents lower on US983 cents.
Brokers passed in 5.8pc of the 47,190 bales catalogued, but the third consecutive offering over 47,000 bales had little effect on the market.
Chinese and Europeans in pre-Christmas rush
Australian Wool Network auctioneer Kelvin Shelley said there was strong Chinese and European demand in the start of a pre-Christmas rush underpinned by concerns about future supply.
“There were a lot of orders place Wednesday night and they are all very much prompt orders, they want them delivered, all on the water before Christmas – it is going to be very hand-to-mouth.
“There is not going to be the wool around.”
Mr Shelley said there has just been a spring flush of wool on the market that normally would have been hitting the market six weeks ago if not for climatic conditions.
“I think they (the buyers) have started to realise as well that ‘we’re not going to get a lot of Merino fleece after this.’
“We’ve had a bit of passed-in wool that has come back, but there are a lot of crossbreds on the market and that’s only going to build over the next couple of months,” he said.
“I wouldn’t be surprised if we see some pretty good sales in the New Year.”
Mr Shelley said the effect of the recent extended wet conditions on sheep was showing up at shearing, with many flocks dropping half to a full kilogram per head in wool cut.
“And that is still off the base of having fewer sheep than they did last year and the year before.”
Mr Shelley said many recent clips had enough length – 90-110mm – but did not have the usual weights at these staple lengths due to climatic and pasture conditions.
Earlier predictions of a coarser wool clip were also not being realised.
“Everything that is coming in, is in the ballpark (on micron).
“I had more test results come back this week and they’re still around half a micron finer than they were last year.
“All these blokes that shore in September, October, November, their sheep have only seen one month to six weeks of green feed and it was only just starting to harden up with some goodness in it.”
The best 18.5 micron and finer wools were quoted 2 percent finer this week with the influence of European buyers concerned about the available supplies of better spinning types.
“We’ve probably seen for the last four weeks some of the European companies haven’t been quite as active as what they were and all of a sudden they were all back in again yesterday as well pushing pretty hard.”
Mr Shelley said in the last four weeks tender wools with high mid-breaks – pretty much across 19.5 and finer – had risen 250-300 cents clean in price.
“It’s just unbelievable, so with the level playing field that we see at the moment, there is only 40-50 cents clean maximum between 35-38 Newtons/kilotex wool and a 25-28N/kt wool in the same micron category.
“It has just all tightened up, so it shows just how much they are pushing and how many Chinese companies have come back in to get supply of wool,” he said.
“Yesterday was one of the best markets I’ve sold in for a while – for at least 2-3 months — just the amount of competition.
“They just needed it, they wanted it.”
Most Merino microns rise 20-50 cents
Mr Plunkett said the AWEX-EMI has been trading in a 50-cent band all season and had hit a seasonal low last sale at 1283 cents, but after this week it now sits midway in that range.
“Commencing the week in isolation on Tuesday, the Melbourne sale made a modest 4-cent rise in the southern Indicator which set the tone for the week.
“Sydney and Fremantle joined Melbourne on Wednesday and all three centres opened very strongly and continued to strengthen as the sale progressed,” he said.
Mr Plunkett said Thursday’s market had a very similar tone, with a strong opening followed by a gradual but noticeable firming of prices, although Melbourne softened slightly towards its close.
“During the series most of the Merino micron range enjoyed rises of between 20 and 50 cents, with the most pressure on selected pockets in the finer microns.
“The skirting market closely followed the fleece market with all types and descriptions enjoying gains of between 30 and 50 cents,” he said.
Crossbreds had mixed results, losing further ground in the 25/26 range whilst recovering in the broader microns. Mr Plunkett said the oddment market didn’t get left behind this week with all carding indicators across all three centres rising on every sale day and finishing around 20 cents dearer.
Sources: AWEX, AWN.