Prices lose steam at Australian wool auctions this week

Large price gains seen last week did not continue at the Australian wool auctions this week. The Eastern Market Indicator (EMI) closed at 1333ac/clean kg which was 36ac or 2.6 per cent lower. The USD EMI dropped 2.3 per cent or 24usc to 1003usc/clean kg. The Western Market Indicator (WMI) depreciated 33ac to a weekly close of 1368ac/clean kg.

However, in a positive move, the WA (Western Australia) market actually improved a few cents on all merino combing types on the final day of selling.

“The excitement of the large price gains of last week quickly dissipated at this week’s Australian wool auctions. The overall lack of enthusiasm from most buying sectors from the outset of selling resulted in losses recorded against all wool types. Buyer confidence was dampened by a sudden slowing of Chinese prompt demand and most operators reverted to risk averse operations once more and active only to completion of forwards and new bids,” the Australian Wool Innovation Limited (AWI) said in its commentary for sale week 17 of the current wool marketing season.

“On the back of generally slow enquiry for new business, negative price outcomes were widely predicted early in the week. To a large extent the market actually out-performed those pre-sale thoughts. Most expectations pointed to the market giving back all of the previous weeks’ gains, but as it turned out, half of the gains made last week in USD values were held onto. USD prices rather than AUD is predominantly a better pointer to demand from China,” the AWI commentary added.

This week, merino fleece and skirting types continued their wild fluctuations of the past few auction weeks. In percentage terms the entire micron spectrum drifted similarly downwards. For the first time since the commencement of the new season, the Euro bound better super fine (less than 19 micron) spinners and best top making types fell in price by 80ac but still maintain a healthy premium of around 200ac above the price guides. Crossbred and cardings wool descriptions all dropped 20 to 35ac.

Chinese top makers stepped back from their usual market participation on the first day of selling, but local traders, European spinners and top makers, and Indian interests remained active. As those Chinese operators upped their buying on the final day, prices consolidated, particularly on types broader than 18 micron, but some heavier falls at the finer end continued.

Around 40,000 bales would be on offer at next week’s auctions on Wednesday and Thursday.


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