The first sale after the three-week recess recorded significant losses in all three selling centres as concerns over global trade tensions eroded traders’ confidence.
Prices fell as the sales at each centre progressed with just 71% cleared of the 41,543 bales on offer. The poor clearance rate prevented further falls. Losses were recorded across all microns with the greatest losses in the 19 micron and broader range. The greatest falls occurred in the west with falls of up to 180 cents for the 20 and 21 micron. The oddment sector bucked the trend, with all three Merino Carding Indicators gaining ground.
The Australian Wool Exchange Eastern Market Indicator finished the week down 4.5%, or 78 cents, to 1,676 Aus cents a kg clean. In US dollar terms, the EMI lost 7.1%, or 87 US cents, at 1,135 US cents a kg clean. On Wednesday, the EMI fell 31 cents to 1,723 a kg clean and down 68 cents at 1,154 US cents a kg. On Thursday, the EMI deaccelerated 47 cents to 1,676 Aug cents a kg and down 19 cents in US dollar terms to 1,135 cents a kg.
The national offering was 22% higher at 41,543 bales, compared with 34,080 bales in the previous sale week of 12 July. The clearance plunged to 71% from 94% in the previous sale. The AWEX reported total value of the wool sold at US$51.1m, taking the season total to US$164.9m.
Sydney sales were characterised by weak demand across microns. Wednesday’s selection of fine wool (<18.5 micron) eased as buyers discounted lots with low style and low strength. Demand weakened further on Thursday as broader (>18.5 micron) lots carrying >2% VM with low strength and high midbreaks lost significantly. Better style wools with favourable additional measurements were less affected. Merino skirtings were down for the week and crossbred lots eased. Oddment lots were mixed with locks and crutchings trending dearer and other types unchanged. The Northern Regional Indicator fell 76 cents to 1,704 Aus cents a kg clean, with a clearance rate of 80% against 95% in the previous sale on 12 July.
In Melbourne, despite strong competition for the limited selection of best style wools, prices were down on Wednesday. Most selections had poorer styles. The market lost further ground on Thursday again due to high volumes of poorer style lots. Falls occurred across all microns and descriptions of merino skirtings on both sale days. Crossbred lots began the week easier, gaining some ground as the sale progressed before weakening on Thursday. Oddment lots were stronger on both days. The Southern Regional Indicator closed 78 cents down to 1,659 Aus cents a kg clean with a clearance rate of 74%, as against 95% in the previous trading week.
In Fremantle, poor buying confidence impacted the market on Wednesday with huge losses up to 90 cents which further deteriorated further on Thursday. Wool producers were not willing to sell at these price levels, with more than 65% of fleece lots passed in. Merino skirtings fell sharply for the week, with those carrying > 4% VM most affected. More than 30% of skirtings lots were passed in on Thursday. In contrast, oddment lots of all descriptions gained ground. The Western Regional Indicator dropped 134 cents at 1,761 Aus cents a kg clean with a clearance rate of just 46%, as against 88% in the previous trading week.
A top maker from China, two of Australia’s largest traders, and the leading carbo and carding manufacturer dominated the auction scene this week. Almost 40% of the merino fleece that was sold was bought by the top two buyers.
Next week will see 43,603 bales scheduled for auction on 14-15 August.
