Price gains on all Merino types and descriptions was the primary factor in the lift in overall levels at this week’s Australian wool auctions. Despite the ever strengthening Aussie dollar (AUD) against the US dollar (USD) in particular, prices in this sector surged anywhere between 20ac and 60ac clean/kg for the week. This continues the escalation of Merino prices with all micron categories 5 to 6.5 percent cumulatively dearer over just the past two weeks. 

The increased buying pressure from China initially activated the market into higher territory, but other global wool destinations have now entered into placing small orders as well. Italy and India have bumped up their auction activity slightly, which has subsequently caused their buy in levels to be lifted to the spot price, or above, to secure some pre-Christmas supply risk mitigation as well as price surety.

The locally based traders and largest exporters led the buyers purchase lists this week, but the price gains came from the strength of indents in the market place competing against their forward commitments and strategic buying. As prices opened dearer, the off shore users lifted bid prices to match the rises giving encouragement to traders to eliminate the initial losses of lower priced contracts  and recover that loss and perhaps gain on new sales. This is theoretical of course, but traders do flourish when demand is consistent and spot prices are available.      

The third largest of the Chinese top makers continues to overshadow the current buying of the usually dominant top two top makers. This has been the case for quite a few weeks now, as that company is somewhat of a uniform supply specialist to the local Chinese industries and state owned enterprise (SOE). A large percentage of recent government uniform orders has reportedly flowed to that factory. 

Over 49,000 bales is currently rostered for sale next week on Tuesday and Wednesday. This will be the last designated super fine sales held until the second half of the season in February 2024. There are just three weeks of auctions before the annual three week recess is taken over the Christmas and New Year period.