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Market downturn halts at Australian wool auctions
Feb '18
Market downturn halts at Australian wool auctions
The market downturn of the past two weeks seems to have halted across most types on offer this week at Australian wool auctions. The Australian Wool Exchange- Eastern Market Indicator (AWEX EMI) registered a 6ac clean/kg reduction for the week ending February 2, to close at 1738 ac clean/kg. In USD the EMI remained fully firm at 1398usc clean kg.

During sale week 31 of the current season, weak market conditions were witnessed initially on the first day of selling, but this was quickly followed by a solid consolidation. Prices then commenced to rise towards the close, particularly across the FNF (Free to Nearly Free - less than 1% vegetable matter) merino fleece wools of all qualities. Cardings remained in a negative trend though, but the rapid falls of past sales were largely contained to relatively minor daily losses.

“The market this week reflected more-so the operations of local buyers and reactions from overseas manufacturers almost immediately followed this stronger lead. Quite often the sale rooms are not the best identifier of global demand trends, but this week the positive sentiment of continuing and strong demand for merino was borne out through that means,” Australian Wool Innovation said in its ‘Wool Market’ weekly report.

Whilst China has been relatively quiet in enquiry and new business, other wool-buying destinations took the opportunity at the lower levels to execute some inventory purchasing. Operations appeared to return by weeks-end though as Chinese enquiry ramped up to normal levels.

Among some significant moves recorded in the market was a very small offering of ultra-fine merino (finer than 16.6 micron) which had an extraordinary gain of around 160ac clean/kg. This was due to a strong order from a high-quality mill in China, which gave intense competition and quite often outbid the Italian orders, albeit in a very low volume scenario.

Generally speaking, the merino fleece markets appreciated by around 20ac clean/kg whilst the skirtings were largely unchanged to slightly dearer in a very turbulent sale week. Crossbred and comeback types registered small losses but encouragingly were rising at the close. Cardings disappointed again by retreating 35ac, but this was a far better result than the heavy losses seen for carding wools in the previous week, the report said.

Improving market sentiment from the merino fleece sector is likely to flow into the upcoming sales as demand signals get clearer once again. The next 3 weeks will see around 40,000 bales being rostered to sell weekly, which is significant in that it is around 10 per cent less than that offered through February of last year. (RKS)

Fibre2Fashion News Desk – India

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