WOOL prices lifted at Australian auctions this week, with early signs of European and Indian interest in Merino lines.

The Australian Wool Exchange said the AWEX Eastern Market Indicator surged 18 cents higher to finish at 1170 cents/kg clean, its largest weekly rise in six months.

AWEX said auctions were rostered as a Wednesday/Thursday program to allow for the east coast public holiday on Monday.

“Sentiment was notably positive from the outset with good support pushing the AWEX-EMI 12 cents higher on the first day.

“Although Thursday was more sedate, there was enough pressure for another 6-cent gain in the EMI,” AWEX said.

AWEX said the rises for the week made it six consecutive daily increases, the longest rally in two years.

“Total volumes for the week were just below 32,000 bales which was similar to previous auctions and in line with forecast catalogues over the next few weeks.

“Volumes are typically smaller at this time of the year; however, January to May this year was almost 11 percent lower than the previous year, contributing to challenging conditions for buyers as they seek out the limited number of lots with desirable traits,” AWEX said.

“Best style, high yields, low vegetable matter, and high tensile strength were all keenly sought after this week whilst Average and Inferior styles attracted larger discounts.

“Merino skirtings also found good support with the better types the main beneficiary,” AWEX said.

“Crossbreds were generally 10 cents dearer for the sale as were Merino Carding types.”

European and Indian interest at auctions – AWI

Australian Wool Innovation trade consultant Scott Carmody said handy price gains were extracted from buyers’ pockets at this week’s Australian wool auctions.

“The change in atmosphere and sentiment that has emerged over the past few sales continued,” he said.

“Steady and consistent rises across most wool types and descriptions were registered.

“Widespread competition greeted sale room operators from the outset, with strong buying intent being shown from many participants from the opening lot. Australia’ largest export trader dominated throughout,” Mr Carmody said.

“Perhaps the most significant factor of change at the moment in the auction environment is some very early signs of European and Indian interest in purchasing Merino wools returning to sale rooms.

“In fact, Europe’s largest top maker displayed some good purchasing numbers on some quality lots containing the lower vegetable matter (VM) levels,” he said.

“Wools from 18 to 21 micron appeared to be the type focus of these destinations.

“Other operators though for these destinations were looking at all VM levels.”

Mr Carmody said the better specification Merino wools finer than 19 micron were perhaps the most well-supported sector of the limited offerings.

“Despite the stronger competition emanating from outside of China, the Chinese interests that have been steadily accumulating these wool types over the past few months seemed keen on keeping the majority of the bales available for themselves and were able to compete against Euro orders given the lower rolling average price that their inventory is.  “

Mr Carmody said the Western Australian market, that is a 98pc Merino wool-type selling centre, posted the highest appreciation in the AWEX Micron Price Guide (MPG) levels.

“The Western Market Indicator shot up 2.4pc, but Fremantle did not sell last week, so a large part of the initial price increases were on the back of catching up to the eastern states closing levels.

“The previous auction week had registered price advances of a general 15ac the prior week in Sydney and Melbourne,” he said.

“Some good weights of crossbred wool were up for sale and the support received from mainly exporter buyers was strong.

“By the end of the week, the mid microns (27 to 29micron) were upwards of 5pc dearer. All other crossbred types showed just small gains as did cardings of all descriptions.”

Mr Carmody said supply concerns will not be alleviated next week as just Melbourne and Sydney will offer a combined 28,226 bales with no auction at Fremantle in Western Australia.

Click here for the latest AWEX Micron Price Guides.

Sources – AWEX, AWI.