Chinese uniform order influences wool prices to three month high as bales offered increase 6.4 per cent
A surprise order of uniforms for the Chinese railway in the past week has driven demand for Australian wool, which may have influenced a three month high in prices on November 13-15, and could impact prices for the next few weeks.
According to Australian wool industry discussion the People’s Republic of China put out an order to Chinese mills to the amount of 2000 tonne of 19.5 micron wool which surprised mill operators who rushed to make bookings, placing pressure on traders to source enough supply.
Prices for Australian reached a three month high as Merino fleeces sold between 10 and 41 cents higher during Week 20 of the selling season.
The Eastern Market Indicator closed the week 23 cents higher at 1151c/kg — the highest level in three months — while prices at the Western Wool Centre at Bibra Lake closed up 27 cents to 1294c/kg greasy.
The high prices have coincided with a willingness by sellers to offload stock in recent weeks, which has been reflected by the 6.4 per cent, or 42,716, increase in the number of bales offered this season, to a total of 708,542 bales.
The value of wool sold has closed the gap on the last season to date figures to be just $15 million behind the 2022 season at $860m season to date.
Australian Wool Exchange senior market analyst Lionel Plunkett said the “wool market has risen strongly” with the majority of the rises recorded on the first day of sales when individual Micron Price Guides for merino fleece gained between 10 and 41 cents across the country.
“The AWEX EMI added 19 cents for the day which was the largest single-day rise since July,” Mr Plunkett said.
“The gain in the EMI was driven by Merino Fleece types while a softer crossbred market prevented the EMI from posting an even larger rise.”
He said while the market opened up hesitantly on Wednesday, after the Australian dollar rose 1.5 cents above the US65c mark, “it gathered momentum over the course of the day” and added another four cents to the AWEX-EMI.
“At the close of the week Merino fleece types were generally 30 to 50 cents higher,” he said.
Those prices were noticeable in the 17-18.5 micron types out of Sydney and Melbourne.
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