Wool prices down as market buckles under numbers

The wool market has been bouncing up and down, as bale numbers continue to surge amid fickle demand.

The wool market is buckling again under a weight of numbers and fickle demand as auctions break for a week.

The benchmark Eastern Market Indicator closed before Easter at 1300c/kg but individual microns lost between 4c/kg and 28c/kg in a softer market across the board.

The only indicator to show rises was 30 microns, which lifted 31c/kg to close at 338c/kg.

There was a pass-in rate of 13.7 per cent of the more than 46,000 bales offered, with just under 40,000 sold.

But Fox and Lillie national wool brokerage manager Eamon Timms said the prices belied the fact there was reasonable demand for the fibre.

“It has been good to see relatively constant business from Chinese users – often new contracts are being done at lower levels week by week,” Mr Timms said.

“At other times when our market is not in good shape, we have the concerning signals where some weeks new business is hard to conclude as the prices from users just are not there or at huge drops to market and those are the markets that show the significant step-downs in the auction room.”

The benchmark Easter Market Indicator closed before Easter at 1300c/kg, with individual microns losing between 4c/kg and 28c/kg.

Mr Timms said a sharp rise in the strength of the Australian dollar against the US dollar on Monday last week took traders by surprise and affected sentiment going into the sale.

“Superfine types have maintained good levels on the best style and sound spinner style types but these are now scarce in the offering,” Mr Timms said.

“There has been pleasing interest last week for sound fleece around 18 micron with 32 to 38 newtons per kilotex, even with some light colour or slightly higher vegetable matter of up to 2.5 per cent, and one weaver in particular from China was buying a decent volume in this area and it was quite supportive of price.

“The selection in the Merino fleece is dropping away and many exporters are finding it more difficult to put container-loads of straight types together.

“More overlong, greater vegetable matter, higher volumes of colour or cotty lots have narrowed the field on buying and batching straight types.”

In its analysis of the market, Australian Wool Innovation said Western Australia was predominantly a Merino selling centre and therefore considered a barometer for Merino wool values.

After last week’s sales in WA, Merino wool values slipped 30-50c/kg in early auctions and settled at that level. In comparison, the two eastern states’ sales saw most wool trading about 20c/kg cheaper.

Demand is expected to be tested next week with 54,000 bales rostered to be sold.