Wool prices suffer as buyers push back on recent levels

Sheep Central, May 26, 2017

AUSTRALIAN wool prices faltered this week as buyer interest in superfine wool waned, according to Landmark wool technical officer Phillip Lipscombe.

Mr Lipscombe said prices fell despite a relatively small offering of 34,270 bales and prospects for smaller weekly offerings in coming weeks.

The AWEX Eastern Market Indicator closed 27 cents lower at 1495c/kg clean, with brokers passing 15.1 percent of the offering.

The most significant price declines were seen for superfine wool of 18.5 microns and finer, with prices falling by as much as 100 cents, Mr Lipscombe said.

Exporters have reported difficulties selling wool at recent price levels and AWEX senior Market analyst Lionel Plunkett said the market reacted this week with substantial corrections across the entire Merino micron range.

More than 10pc of the national offering this week was wool that had previously been offered for sale.

Mr Plunkett said on the opening day of selling this week, the benchmark Eastern Market Indicator lost 10 cents on the back of significant falls in the 18.5 micron and finer range, generally between 25 and 50 cents.

“The first day gave a good indication of what was to occur on the second, all types and descriptions suffered further price reductions, this time another 25 to 50 cents, pushing the EMI down a further 17 cents to 1495c/kg clean.

“The odd lot of high style wool exhibiting excellent test results were not as badly affected, but any wools normally receiving only small discounts quickly lost buyer support,” Mr Plunkett said.

He said the skirting market headed in the same direction as the fleece, with finer wools and lots carrying higher vm levels were hardest hit, in some cases dropping over 80 cents for the week.

“Many lots exhibiting only small impurity amounts were heavily discounted as buyers looked for value in a falling market.

“A very limited selection of oddments saw keen competition among the carding buyers, enabling this sector to go against the trend of the others and record small increases for the week, pushing the regional indicators up an average of 5 cents,” Mr Plunkett said.

Crossbred wools performed relatively well when compared to the Merinos, he said, with strong competition evident and most types and descriptions only eased by 5 to 10 cents.

Mr Plunkett said the amount of wool coming onto the market continues to retract, currently just over 30,000 bales have been rostered for sale in Sydney, Melbourne and Fremantle.

Click here to see the latest AWEX Micron Price Guides.

Sources: Landmark, AWEX.


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