Demand from China pushes up wool prices in Australia

21 Oct '21

3 min read

Pic: Shutterstock

With Chinese top makers and traders pushing up the demand, large price gains featured at this week’s Australian wool auctions. The intense sale room competition converted into additions in value on almost every type and description on offer. Merino fleece and skirting recorded the largest gains of 6 per cent on wools broader than 18 micron.

The Eastern Market Indicator (EMI) appreciated rapidly throughout selling to close 3.5 per cent or 46ac higher at 1369ac/clean kg. The AUD value against the USD also spiked upward by 2.2 per cent which added further value to wool when expressed in USD. A significant 5.7 per cent or 56usc rise of the USD EMI to 1027usc clean/kg occurred. The Western Market Indicator (WMI) broke the 1400ac barrier in a 52ac price hike to a 1401ac clean/kg closing basis.

The Merino fleece and skirting were again the target market with the largest gains recorded on wools broader than 18 micron. A general 80ac or 6 per cent gains was made. The super fine types were by no means neglected but a lesser rise or around 1.5 per cent or 35ac was made on types finer than 17.5 micron. Crossbred wools produced a 5ac gain and cardings traded generally unchanged but had some very mixed results within the individual types.

Upwards of 100ac clean on some individual sale lots were achieved, but general rises of 50ac plus were recorded on Merino wools and just 10ac on crossbred wool as those types remain hard to sell.

“The price gains were widely expected, and those thoughts were transmitted throughout the trade pre-sale. Perhaps the Merino fleece spiking to initial 80ac gains took many by surprise, but almost all buyers remained active in the market despite the magnitude of those price gains,” the Australian Wool Innovation (AWI) said in its commentary for the sale week 16 of the current wool marketing season.

Towards the end of the first day’s selling there appeared to be a lull as buyers assessed the speed and extent of price rises. As a result, a price retraction and consolidation on the final day greeted buyers and that softening remained in play for most of selling. Towards the end of the auctions those price degradations were largely recovered, and prices were almost back to the previous day’s closing levels as competition ramped up once more as buyers looked to cover off risk and exposure, the AWI commentary added.

Around 46,000 bales would be on offer at next week’s auctions on Tuesday and Wednesday.

Fibre2Fashion News Desk (RKS)

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