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Radical price movements of super fine merino this week
Mar '17
A quick glance at the unchanged and record equalling weekly close of the AWEX Eastern Market Indicator (EMI) at 1546ac clean/kg would appear that this week's Australian wool auctions were rather mundane. This was far from the case, as some radical price movements were in evidence in the market, particularly at the super fine end of the merino offering.

The large volume of around 50,000 bales initially defied buyer expectations of a general correction on the mid and broader microns, and a strong first day of auctions saw the EMI push up 5ac to 1,551ac clean/kg, the Wool Market report from the Australian Wool Innovations (AWI), for the week ending March 23, said.

Mid week though, the local traders, in the main, became more circumspect in their bullish operations and subsequently the market entered into a drift for all wools broader than 17 micron. Many of the larger traders appeared to be more satisfied in their open positions and moderated their inventory intake. Chinese indents remained keener, but they too adjusted to the calmer tendency half way through the final day, as buying volume became easier for them. This eventually impacted on the latter part of the Melbourne selling and flowed through to the Fremantle centre later in the day.

The trend within the Merino fleece market continued on its established trajectory, but the focus moved a micron finer to the wools finer than 17 micron. All type descriptions within this micron were caught up in the intense competition which saw prices move upwards by over 100ac clean/kg in a single day, followed by a closing day gain of another 40ac. On average these wools gained around 150ac clean for the week, but some individual lots of the better specifications were well over 200ac or 10 per cent dearer for the week. The 17 to 19 micron super fine wools were still well sought though, with healthy gains of around 30 ac achieved on the first day, but half of this was given back on the final day, with the best wools unchanged and the lower types 30 to 40ac cheaper.

Within the Merino sector of wools broader than 19 micron, sale room operators were expecting a slight pullback from the outset of selling, but prices maintained remarkably well till basically the last quarter of the week. Even then, the pullback was rather weak and insignificant, with the 19 to 20 micron area only 5 to 10ac lower and the very large offering of types broader than 20 micron weakening slowly by varying degrees from 10 to 30ac clean/kg apart from the heavier vegetable matter (VM) sale lots with VM levels of over 6 per cent in their fleece lines, which finished up being 60ac cheaper for the week, AWI said.

Merino skirtings travelled the same path as their fleece counterparts, but unlike the fleece concentrating to a more restricted area, skirtings remained within the same boundaries set over the last few weeks. Buyers focused on the wools finer than 19 micron, and for the most part were selling at 30 to 50ac higher and more at the very finest. Broader types remained initially firm but then weakened to be 25ac cheaper at the close. All carding types drifted slightly and were maybe 5ac lower on average for the week, but at these record levels it is only a cent or 2 in greasy kg. The finer comeback/crossbred wools of 25 to 27 micron were well sought and sold 10ac dearer, but anything broader than 27 micron was 10ac off the pace. The large discounts for the ill prepared crossbred clips emerged once more as the market weakened, with buyers not prepared to pay up for poor or nil preparation.

Next week, too, all the three centres—Melbourne, Sydney and Fremantle—will operate, and over 46,0000 bales is to be offered which shows that supply is not weakening at all, and auctions are in line with the increased testing figures. (RKS)

Fibre2Fashion News Desk – India

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