RENEWED demand from mainly China, but also India and Europe, lifted auction wool prices in Australia this week.

The Australian Wool Exchange said the market bounced back from the falls recorded last week.

“On the opening selling day, the market opened cautiously.

“By day’s end in the eastern markets, the Merino fleece Micron Price Guides (MPGs) movements ranged between plus 4 and minus 17 cents,” AWEX said.

“The positive movements in the other sectors were large enough that the benchmark AWEX Eastern Market Indicator (EMI) finished the day unchanged.”

AWEX said the sale was heavily influenced by currency.

“Due to a weakening of the Australian dollar (AUD) when viewed in US dollar (USD) terms, the market retracted.

“The EMI dropped by US8 cents/kg.”

AWEX said the western region selling last in the day had a noticeable increase in buyer sentiment, resulting in spirited bidding and price rises as result.

“The Merino fleece MPGs in the West rose by between 10 and 15 cents for the day, setting up a positive tone for the following day’s opening.

“This buyer positivity carried into the second day and the prices on offer for Merino fleece types were generally on the rise,” AWEX said.

“The MPGs movements across the country ranged between minus 12 and plus 25 cents,” AWEX said.

“It was again the west selling last, recording the largest prices increases.

“The increases were so large that the MPGs for 19.0 to 20.0 micron closed higher than the south.”

AWEX said the EMI closed the day and the week 4 cents higher at 1249 cents/kg clean.

“The EMI has now fallen only once in the last fourteen selling days.

“In a an almost mirror image of the previous day, a strengthening of the AUD meant that when in viewed in USD terms the rise was larger, the EMI added US9 cents for the day, closing the week one cent higher at US787 cents.”

Renewed demand into market – AWI

Australian Wool innovation trade consultant Scott Carmody said wool auction prices resumed the largely dearer trend this week.

“Renewed demand was injected into the market predominantly from China, but enough interest from the sub-continent and Europe was evident to help stimulate the auction upwards.

“The Western Australian selling centre at Fremantle led the national price gains with all Merino types there trading at levels of 25-35 cents dearer for the week,” he said.

“Eastern markets were very firm to 10 cents dearer within all type sectors on offer.”

Mr Carmody said initially, forward selling exporters were quite keen to build some purchased volumes without spooking the market, but this strategy had to be swiftly re-evaluated.

“Strength of competition was seeing some larger than quoted spikes in prices, particularly on those lots that exhibited higher yield and better strengths.

“These lot types are getting scarcer due to adverse seasonal growing conditions in most of the southern half of Australia worsen,” Mr Carmody said.

“A percentage of these lots are required for most contracts to average specifications correctly for shipment.”

Mr Carmody said Australia’s largest traders dominated the buyers lists this week, pushing aside somewhat the direct buying orders from top makers.

“All buying sectors were active, but in many instances the intent and actions of the larger trading companies was just too strong.”

There are currently 35,699 bales listed for sale in Sydney, Melbourne and Fremantle next week.

Sources – AWEX, AWI.