Australian wool markets found some stability this week, bringing an end to four consecutive weekly declines. The Eastern Market Indicator (EMI) edged 1ac/kg higher to 1,820ac/kg as reduced supply and improving competition encouraged some buyers who had been sitting on the sidelines to re-enter the market.

A total of 3,171 fewer bales were offered than the previous week, while currency movements had little influence on price discovery, with the Australian dollar and Chinese yuan largely unchanged.

The unusual three-day selling pattern produced a mixed result. Tuesday ended the EMI’s seven-day losing streak with a 2ac/kg rise, while weaker trading on Wednesday reversed those gains and pushed the indicator 5ac/kg lower. The standalone Sydney sale on Thursday delivered a stronger finish, with Merino fleece categories gaining between 10 and 35ac/kg and the Northern Indicator rising 11ac/kg.

One of the more notable signals is the widening price gap between finer and broader Merino types. AWEX reported that the difference between the Southern 18-micron and 21-micron MPGs has now reached 651ac/kg, compared with just 199ac/kg at the first sale of the calendar year. Crossbred wool remained under pressure, recording a further general decline of 15ac/kg for the week.

Chinese processor participation increased progressively across the selling period, with some buyers reporting them needing wool to ship to fulfil current top orders, and not stock. This helped narrow the competitive gap with traders and provided additional support to the market. Traders are reporting larger enquiries and conversion to forward contracts for the standard or straight China types and that seems to be reflected in the strength at the close of selling.

Underlying supply remains tight. Australian-sourced offerings are 12.2% below last season, while first-hand offerings are down 13.5%.

Around 35,096 bales are forecast for Week 16, including a designated Sydney superfine sale. The larger offering will provide an important test of whether the late-week improvement in demand can be sustained, particularly in the finer Merino categories.