Australian wool auction markets again defied the potentially negative price outcomes due to the large supply this week. Prices held onto the established general clip value, despite the 50,000bales being offered. There were some individual variations recorded across wool types with falls at the finest end of the Merino sector and some very welcome and high percentage gains on crossbred wool types being the most significant.

The Eastern Market Indicator (EMI) added 8ac or 0.6% to conclude the “first half of the calendar year selling. The AUD EMI closed at 1428ac clean/kg after starting the 2021 year at 1157ac - a 23.4% appreciation. In USD terms, an unchanged forex pairing with the AUD week on week saw an identical 0.6% or 6usc gain to close at 1059usc clean/kg.  The WMI (Western Market Indicator) gained 20ac to go into the annual winter recess at 1462ac clean/kg. 

Demand from China, with some support from India, Italy and the Czech Republic was strong enough this week to support the volume offered and see a clearance of rate of 86.6% of wool auctioned reaching trade hands. Widely variable pre sale thoughts were aired, with one or two major players bullish in predictions, but the general (averaged) consensus matched the final result of the market just holding on. 

The Merino fleece and skirting market was strongly led by local traders but very strong additional competition came from Chinese indents and Chinese top makers to keep prices generally in check. Types finer than 17 micron though were hit hard and dropped 40 to 80ac with larger volumes available from previously held in store wools adding to the freshly shorn clip wool. All 17.5 micron and broader Merino wool was near unchanged with some minor movements of just +/- 10ac being registered by the close of selling.

An aggressive purchasing strategy was witnessed from Europe’s largest top maker within the crossbred sector resulting in gains of 6% to 9% for all wools 26 to 30micron. The 32 micron wools gained over 15% but this was on very limited quantity. This single buyer took over 32% of crossbred wool type sold with their nearest competition arising from a Chinese indent and local exporters who took 11% or less. 

Carding wools sold generally firm for the week with the local manufacturers keen but often outbid by traders and Chinese indent buyers.

The immediate prospects for wool fortunes appears reasonably positive at present, with demand expected to build over the 3 week recess that Australia’s wool auctions are now in. This hiatus should assist exporter and buyer finances and allow full trade operations upon resumptions of auction selling in the week commencing 9th August. For more market intelligence listen to the latest episode of “The Yarn” podcast at www.wool.com