NOT a lot of change to the overall wool market indicators last week, with AWEX's Eastern Market Indicator closing 5c higher in local currency terms, but a decrease in price of 9c in US dollar terms, and 11c higher in Euro terms as currencies moved in all sorts of different directions.
AWEX's Northern Market Indicator closed up 13c on 1407c. The 17 micron indicator closed on 2370c, 18 micron 1980c, 19 micron 1633c, 20 micron 1365c, 21 micron 1298c, and 28 micron 407c.
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The US dollar is getting stronger as markets anticipate higher interest rates shortly in the US, and lower iron ore prices, and a more stubborn (or perhaps insightful) Reserve Bank here is pushing the Aussie dollar down.
Similarly, in Europe, the Euro is weakening against the USD making calculating wool prices a little more challenging than usual.
Apart from the currency induced gyrations, the wool market is a pretty 'ho hum' sort of affair at present.
Things are certainly moving along nicely with more than 90 per cent of the offering being sold, volumes are up substantially on last year, as are prices, and wools are gradually coming out of hold stocks onto the market.
But, there is no real spark or urgency about the trade at present.
Perhaps the exporters and processors are a little jaded as the calendar year draws to a close.
With only four weeks of selling remaining until the Christmas Recess things seem to be a little slower and more subdued than normal.
With only four weeks of selling remaining until the Christmas Recess things seem to be a little slower and more subdued than normal.
- Bruce McLeish, Elders
There is obviously no issue with Chinese quota this year, and the shipping cut-off was potentially last week, given the abhorrent state of sea-borne transport issues at present.
The European market has been going hell-for-leather recently, and while there will probably be a last-minute flurry from them for the remaining superfine lots up until February, most of the Italian and German processors are just looking in cupboards, and under beds for any prompt stock of tops or yarn that they have missed.
The few remaining combing mills in Europe have bulging order books, and delays of processing are more likely than not.
Those buying tops or yarn from China have a list of scheduled shipments as long as your arm, and getting longer as moving a container from Shanghai to La Spezia or Hamburg still takes close to three times the normal, pre-covid transfer and six times the cost.
Mills in China who can, have a large export order business and are reticent to book too much more, for fear of overloading their fragile production schedule.
Export business for Chinese early stage processors is seen as reliable, but cash flow restrictive, as well as quality restrictive - compared to the domestic market where they can often turn over cheaper, lower quality product for quick cash.
Along with the faltering electricity lottery still plaguing some sections of the processing chain, labour shortages mean that many mills in China are not able to operate at anything like full capacity.
Owners lament that the younger generation do not want to work night shift, or are reluctant to turn up regularly at the factory.
When alternative employment opportunities are available, pushing trolleys or cans of wool around a noisy, dusty carding room is perhaps not the first choice for a millennial, despite how character building the baby-boomer generation thinks it could be.
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Coupled with a fairly lack-lustre domestic retail environment in China, the labour and energy issues make for a subdued appetite for greasy wool.
Medium Merino is obviously seen as the best value fibre at present, and these types are tending to rise strongly, along with the usual knitwear ingredients of pieces, bellies and carding types, providing VM is not excessive.
Superfine Merino, is still that luxury fibre everyone wants, but not as frenetically as a couple of months ago.
And crossbreds, were coming back into vogue as a blend component, but now seem to be struggling a bit more - although the Australian market has managed to sell a plethora of them this year, compared to last season, so there is probably not a mountain of them in grower held stocks as some pundits were beginning to fear.
The biggest impediment to the Chinese domestic market at present would appear to be that dreaded little epidemiological particle called Covid-19.
People are just not able to move around China as they normally would, and have been until a month or two ago.
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As Beijing counts down to the Winter Olympics, and covid ramps up as the weather gets colder, the zero-tolerance policy gets more challenging to implement, and the lock-downs get stricter and more frequent.
The Nanjing Wool Market Conference, usually held in September was postponed until Late November, and now will be held virtually, meaning the usual gathering of buyers and sellers over a glass or two, cannot take place.
Garment and fabric buyers as well are marooned in their city offices, and unable or unwilling to travel to the textile centres like Zhangjiagang or Tongxiang this year.
A negative Covid test within the past 24 hours is apparently required to book into a hotel in China at present, making business travel just that bit more difficult.
The big selling events in China have been and gone now, with just the Black Friday sales to go.
Woollen garments did okay at these sales, but the weather was not cold enough for the sales numbers to be great.
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So, retailers are not screaming for more product just yet, and therefore the processing fraternity are not clamouring for more greasy wool.
The export orders and the maintenance volumes for domestic are keeping things ticking over, but certainly not at a frenetic pace.
A large uniform order or a restriction in supply could certainly change the outlook quickly, but until something like that eventuates it will be more of the same.
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