Prices slow demand
With Fremantle's wool sale in recess, last week's 27,601-bale national offering had the Eastern Market Indicator (EMI) closing down 17 cents/kg at 1079c/kg clean.
However, Elders national wool manager Andrew Dennis said the stronger $A had the EMI up 0.8 per cent in US currency.
"Price resistance did build last year with the high prices, particularly in $US terms, and we have seen the usual correction in demand as a result," he said.
Many mills in China had continued to run, at slightly reduced capacity, and there was clear evidence of stocks building in the early stage processing sector - tops and yarn.
"From a technical perspective, a price level of 1200c for 21 micron wool does provide good support and the market should remain above this level until recess," Mr Dennis said.
June was traditionally a time when early stage textile orders slowed as the season's goods were being finished for the retail season.
"Low supply of greasy wool is balancing the lower demand at this time, however, a spring flush of wool will probably tilt the scales towards a further drop in both export and domestic goods, so it is not all one-way traffic," Mr Dennis said.
"The uncertainty will remain until the world economic situation becomes less volatile and forward selling spring wools above 1200c for 21 micron must be considered unless holding wool into 2013 is an option."
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