Wool prices stage recovery with lower bale offering

Sheep Central, February 12, 2016

Wool sales Landmark1 MelbourneWOOL prices surged this week, led by ultra and superfine micron rates of 2000c/kg-plus clean for top stylish Tasmanian and Victorian Saxon-type wools.

The AWEX Eastern Market Indicator closed 19 cents up on 1284c/kg clean, with the Australian dollar on US71.08 cents and the EMI in US dollar terms up 4 cents to US913c/kg.

Brokers passed 6.8 percent of the offering of 37,844 bales, 7062 fewer than last week.

Following on from recent weeks where a few lines have hit the 2000c/kg clean mark, 10 lots of 13.5-18.5 micron wool sold at or above the $20/kg level and up to $23/kg clean, mainly to Italian buyers.

New England Wool managing director Andrew Blanch said the current prices for particular Saxon-type wools in recent weeks reflected demand for this wool from Italian processor Vitale Barberis Canonico and a desire to protect the market for these wools and ‘incentivise’ growers.

“It is just a realisation that these wools are disappearing and something has to be done.”

Some best style, length and tensile strength superfine spinners wools this week came under intense pressure from Italian interests this week and often received premiums of up to 350c/kg clean over Chinese types.

Mr Blanch said the more general 100-150c/kg clean market premium for Saxon-type wools over lower style, length and tensile strength Chinese types was good to see.

Strong recovery after weeks of negative results

AWEX senior market analyst Lionel Plunkett said after a fortnight of negative results there was a strong recovery at this week’s auctions.

“Volumes were fairly limited and the dollar was lower, both giving some assistance to the overall result.

“At 37,844 bales, the national catalogue was the smallest in five months and well below volumes from recent auctions, and the dollar retreated almost 1 cent after flirting with 72 US cents last week,” he said.

“Price-wise the 19-cent improvement in the AWEX-EMI was carried higher mainly by the Merino fleece sector, which jumped around 30 cents for the series.

“As with recent auctions buyers remained enthusiastic for the better types which were well represented in the finer microns by a stylish Tasmanian catalogue,” Mr Plunkett said.

“This portion of the offering was sold in isolation on Tuesday and was classified as sale “L33”, the only designated Launceston sale for the season.”

Lower spec wool also sought

Mr Plunkett said lower spec types (30nkt, high mid-break) also attracted strong competition later in the week and narrowed the discount to the more stylish and 40nkt types.

“Merino skirtings benefited from the interest in the fleece sector and made 10 to 30 cent increases this week.

“Stylish, low-vm types attracted the most interest.”

Crossbred wools had varied results, with small rises balanced out by weakness in selected areas, he said.

“Merino cardings continued to trend lower, losing 10 to 15 cents as measured by the Merino Carding Indicator.

“The Southern MC Indicator has now fallen for 8 consecutive sale days over three weeks. Just over 42,000 bales are expected in each of the next three weeks.”

Positive result underlined by strength of demand

Australian Wool Innovation’s weekly market review said the extremely positive results at this week’s auctions were underlined by the current strength of demand for the fibre.

As shares, stocks and other commodity markets continue to falter across the world, wool is trending to a much more optimistic path, despite the market’s main buyer China on holiday for their New Year, the review said.

The review said carding wools finished the week on a better note as some buyer interest returned, but 20ac/clean kg was a generally quoted loss for the series.

“A few usual buyers of carding types made comment as to the “seasonality” of the carbonizing business coming to an end recently, but those mills are expected to have renewed orders shortly to commence production for the 2016/17 Northern hemisphere autumn/summer retail period.”

The AWI report said strong interest is expected at next week’s sale of around 42,000 bales, particular on the dwindling supplies of Merino fleece.

Click here for AWEX’s latest Micron Price Guides.

Sources: AWEX, AWI.


Your email address will not be published. Required fields are marked *

Your comment will not appear until it has been moderated.
Contributions that contravene our Comments Policy will not be published.


Get Sheep Central's news headlines emailed to you -