Australian wool market still on wild ride
The Australian wool market continued its yo-yo pattern, falling down last week after its previous gains and losses during the past six months.
But with a hopeful sign, the market’s immediate opening losses stabilised on Thursday with increased buyer demand.
Australian Wool Exchange senior market analyst Lionel Plunkett said the wool market’s “wild ride” saw the Eastern Market Indicator fall by 26¢/kg for the week to 1517¢/kg.
“The Western Market Indicator fell by 32¢ to 1621¢/kg,” he said.
Wool Agency director Andrew Johnston said the recent price volatility of the wool market had continued.
“With a relatively large national offering of 40,000 bales rostered for sale, sales commenced in all centres on Wednesday,” he said.
“After the previous week’s positive market, withdrawal rates on day one were low — fleece and skirting values from the outset eased, closing the day in Fremantle down 45¢/kg to 70¢/kg clean.”
Mr Johnston said finer microns were the most affected, while oddments enjoyed better support with most types 10 to 20¢/kg clean higher.
“Resistance to the price downturn was reflected in the 25 per cent pass-in rate at Fremantle,” he said. “That price resistance was obvious on day two with withdrawal rates prior to sale in all centres rising.”
Mr Johnston said the market tone improved with fleece and skirting values regaining 10 to 20¢/kg clean of the previous days losses — oddments were also up another 10 to 20¢/kg clean dearer.
“With the better market tone, the pass in rate in Fremantle fell to 15 per cent — still relatively high and all adding to the unsold wool that will re-enter the market at some stage,” he said.
The National Council of Wool Selling Brokers of Australia executive director Chris Wilcox said the current level of wool market volatility was the highest in 20 years.
“The extreme volatility of the EMI is being driven by the changing price levels between 19 and 23 microns and for crossbred wool,” he said.
“It is difficult to imagine this volatility abating in the next few months, given there is no clear direction in the demand fundamentals and supply at auction is constrained.”
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