Australian wool market sees minimal price movement this week

The market opened weakly across all sectors. Buyers initially showed little enthusiasm, letting the market drift due to a lack of immediate demand signals for new business. Most forward sellers aimed to extract every cent possible from outstanding contracts.

Contrasting this initial sluggishness, China’s largest two top makers dominated the Merino segment on opening day. They capitalised on the good selection of new season wools and more attractive pricing, aided by a 0.5 per cent overnight drop in the AUD. These mills purchased a combined 39 per cent of the Sydney Merino fleece and 25 per cent of the Merino fleece sold in Melbourne on the first day.

The second and final day of selling was markedly different, with competition igniting, particularly in Sydney. Merino fleece prices increased as almost all buyers looked to acquire volume. The next week will determine if these gains are sustainable.

Over the past month, trader buyer exporters have struggled to find a buy/sell rhythm. Demand from China has been consistent but below normal levels, while other export destinations have shown frail interest in Australian wool. Indian buying remains sporadic, relying on indent operations and occasional forward commitments. Continental European buyers appear content to wait until after their summer holiday season to consider further inventory.

A positive note in the market has been the recent buying from Europe’s two biggest top makers over the past couple of sale weeks. Although their purchasing is type and volume restricted, focusing on NM lots and lower vegetable matter wools, it has placed pressure on other buyers, helping to maintain price levels in those areas.

Next week’s auction will feature 33,000 bales, the last sale for a month.

Fibre2Fashion News Desk (KD)