Just when we thought the wool market might slow down after the heights experienced before the winter recess, the opening sale pushed wool back on an upwards trajectory closing the market above the previous sale by nine cents a kilogram.
With an increased offering of 49,415 bales with just 4.7 per cent passed in, the Australian Wool Exchange (AWEX) Eastern Market Indicator (EMI) closed at 1990 cents a kilogram, with the EMI gaining even more in US dollars adding 18c/kg for the week to close at 1481c/kg.
In the highest sale returns ever, the AWEX reported a return of $105.3 million – only the second time that $100 million has been achieved.
A clear message seen was the competition on non-mulesed wool. AWEX market information manager Lionel Plunkett said we are seeing a more regular demand for this type of wool.
“I wouldn’t be surprised if this trend continued, given how those premiums over the last 12 months have improved,” Mr Plunkett said.
Mr Plunkett said buyers focused on Merino wools 19-micron and finer, pushing these types up by 40c/kg to 90c/kg. “The coarser microns did not fare as well as their finer cousins, 21-micron and coarser fell by 10c/kg to 30c/kg,” he said.
AWI trade consultant Scott Carmody said an interesting element in the return sales last week was the clear evidence of European buying leading the market.
“Their was strong support on the better specification types at the finer end of the Merino offering from both the usual Italian operators and forward sellers,” Mr Carmody said.
“This eventually forced Chinese buyers to accept that the price was falling away no further for the time being and they needed to join in to secure immediate supply requirements.”
Broader Merino fleece types sold 10c lower generally. Cardings sold 20c higher but crossbreds depreciated substantially to trade 35 to 70c lower.
Crossbred wool didn’t see the shining results of Merino fleece this week. Demand was lacking and as a result, 26-28-micron wools lost 50 to 90 cents.
A look ahead shows that roster offerings are declining, with 37,290 listed for next week and 33,761 for the following week.
This should support the market in the short-term.