AWI Wool Sales Commentary (27 August 2021)

Australian wool auctions produced positive results this week across all Merino wool types and descriptions while crossbred wools largely held their values. It was just the two Eastern Australian centres of Sydney and Melbourne that held auctions with 28,000 bales being put in front of the trade. A clearance rate of 85% was achieved for the week. 

A gain of 15ac, or a touch over 1%, was made to the Eastern Market Indicator (EMI) to close at 1350ac clean/kg for the week. This was 4ac lower than the week high point of 1354ac at the Tuesday close. The major trading currencies used in wool trading were all weaker again as the AUD continued its struggle against being sold down, albeit the deterioration slowed considerably week to week. In USD terms, the wool price gained similar to AUD levels by being 0.9% or 9usc higher at the close to finish at 978usc clean/kg.

Good competition was witnessed on the first day of selling as fresh business, although limited in volume, was concluded with overseas users. This was mainly into China but a smattering of new firm contracts from the sub-continent and Europe was reported as being executed. This better sentiment immediately transferred into sale rooms to cover off exposure risk and price gains on most Merino wools to the extent of 30 to 40ac from the outset and continued throughout selling on the opening day.

The following day at auctions saw a mixed retraction of that positivity as off shore buyers appeared to have fulfilled their pressing needs and local buyer/exporters reverted to a more risk adverse purchasing strategy once again. Price levels retreated on much of the offering broader than 18micron by 15ac but super fine types finer than 18micron continued to trend dearer, particularly in Melbourne where prices finished generally 30 to 40ac higher than the Sydney market closing values.

Compared to the Merino fleece and skirting sectors, the carding and crossbred segment of the selection had a rather mundane week. Just minor price fluctuations occurred within those groups as crossbreds sold just to the seller’s favour and cardings leant toward the buyers favour. The stability of pricing in both those market areas seems to have added confidence but the lack of volume of the better quality or properly prepared wools is apparent to all buyers. 

China’s largest top maker led the lists but other first stage manufacturer indent buyers from that nation were increasingly interested. The local Aussie traders ably supported the market as did Europe’s largest top maker as it concentrated efforts once more on the crossbred wool types, with just subdued support from other traders, processors and indent operators. 

40,000 bales is currently rostered at all three centres for next week. 

Source: AWI