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Worsted weaving yarn prices up

24
Aug '07

Japanese domestically traded yarn prices have continued to rise throughout 2007 with prices remaining at historically high levels despite some easing of raw wool prices. In July, 2/60s yarn prices stabilised at a 13-year high.

Since the bottoming of the Australian raw wool apparel market in December 2005, average US$ monthly prices, as measured by the Australian EMI, have risen by around 65% to early July 2007. Over the same period, Japanese domestically traded 2/60s worsted weaving yarn monthly prices have risen by around 55%.

Monthly yarn prices have risen faster than Australian raw wool apparel prices since January 2007, helping yarn prices catch-up with the greasy wool market. With the high Japanese yarn prices and weaker raw wool apparel prices in Australia, margin pressure on Japanese spinners looks to have eased slightly.

Domestic yarn traders envisage current high yarn continuing up until additional/follow-up ordering for the coming winter season will have been completed. After that, sustainability the higher price levels appears uncertain.

For example, men's apparel manufacturers/retailers are shifting their fabric sourcing from pure-wool to wool-blends or increasing the blend ratio for their spring/summer 2008 orders, in order to keep retail prices flat.

Australian Wool Innovation Limited

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