Australian wool auctions produced some good results this week for sellers. Local price levels received a general 1.2% increase as trader buyers returned to their place at the top of auction purchase lists.  Several price determination factors were at play this week, but the general consensus was that the highest priority was fulfilment of outstanding contracts. This forced price rises into the local sale rooms as trading exporters quite often had to outbid the top makers and indents in order to meet their shipment obligations. 

China’s largest top makers remained very interested to stay strong in the market, but the strength of competition saw them being regularly beaten for price on wools they had bought readily the week prior. The more dominant indent orders and vertical manufacturers buy orders took their prompt requirements for mostly the better end wools in the offering. Traders followed where they needed to and thence the first stage users. 

The positivity of this week’s markets has been welcome but more importantly, needs to continue to provide confidence to all. Of most interest this week were better Merino wools finer than 19 micron. In this instance, “better” meaning good to best style whilst exhibiting higher staple strength and higher yield measurements. Whilst subsequent micron price guides saw rises of 30 to 50ac, these top end wools were a full 50 to 80ac dearer, particularly finer than 17.5 micron. Almost exclusively, these wools were purchased in volume by Chinese and Indian users.

All other Merino wools sectors were around 15 to 20ac higher as was the crossbred wool type segment. Cardings were largely maintained, but the Melbourne carding indicator was the only anomaly for the week by being the only negative price guide (-28ac) across all centres and types.

The falling supply numbers have all buyers of Australian wool continuously looking at their strategies on both the buy and sell sides. The most obvious decline in the Australian market at present is the lack of wools generally suited to European worsted use. The lack of returns for several years now has seen growers of this type of speciality wool look to other wool sectors or in some cases, other on farm enterprises. 

Around 28,000 bales are being offered next week, with the WA centre at Fremantle selling just one day again on Tuesday.