The Australian wool market appeared to have gone berserk having turned around in a stunning fashion, breaking a host of records along the way. It was a week that left players wondering, with the AWEX EMI finishing 12.5% up in Australian currency and jumping 13.4% in US currency at sales in Sydney, Melbourne and Fremantle this week. The weekly changes since the resumption of sales now ranged from -122 cents two weeks ago to +170 cents this week. The EMI finished the week at 1,535 Aus cents a kg clean and at 1,056 US cents in US dollar terms. On Wednesday, the EMI surged 130 cents to 1,495 Aus cents a kg clean and up 94 cents at 1,025 US cents a kg. On Thursday, the EMI surged a further 40 cents to 1,535 Aus cents a kg and up 31 cents in US dollar terms to 1,056 cents a kg.
The AWEX reported total turnover of wool sold at Aus$34.20m, taking the season’s total to Aus$330.69m.
The performance is not only indicative of the volatility of current demand but also a result of the hand-to-mouth nature of the operations in modern days. In the limited supply, any slight shift in sentiment to the positive produce magnified movements, and this week’s gains were exaggerated by the market price falling way below the balance point of supply versus demand.
The auctions were firmly led by the local Australian exporters. The top four exporters topped buying lists and from the outset were intent on locking some volumes in. Price levels available from the overseas users were reportedly lifted to full market rates and above, flagging the most likely dearer market result that eventuated. Indent operators only became influential towards the close as they were initially left behind by the traders at the start of selling. Buyers for China were dominant, with support from European and Indian buyers.
In Sydney, the single-day sale saw strong demand generate significant price increases. Large price rises occurred across all microns, both merino and crossbred. Merino skirtings were also back in favour while the oddment sector climbed upwards with locks and stains increasing substantially. The Northern Regional Indicator gained 126 cents to 1,534 Aus cents a kg clean with an overall clearance rate of 92%, against 85% in the previous week.
In Melbourne, the two-day sale saw prices surge across all microns. The 18.5 to 22 µm lots gained between a lot on the week. The merino skirtings market was solid, with best style lots gaining. Crossbred wools also gained while oddments strengthened. The Southern Regional Indicator jumped 198 cents to 1,536 Aus cents a kg clean with a clearance rate of 96%, as against 91% in the previous week.
In Fremantle, price gains followed the trend of the Eastern states, driven in part by a reduced offering, as 29% of lots were withdrawn prior to Wednesday’s sale. Further price rises occurred on Thursday with strong buyer competition a feature of the day. A small offering of merino skirtings was keenly sought, while oddment lots were also dearer. The Western Regional Indicator gained 242 cents to 1,625 Aus cents a kg clean with a clearance rate of 94%.
Next week’s offering has been increased to 31,107 bales, with all three centres in operation.
