A COMBINATION of AFL grand final fever in Melbourne and holiday mode in China appears to have been behind a lack of interest in WA wools at the Western Wool Centre (WWC) last week.
Because of the grand final parade public holiday in Melbourne on Friday sales at the Melbourne wool centre – the main Australian Wool Exchange (AWEX) live auction selling centre – were moved forward a day.
So the first AWEX wool auction last week was a stand-alone sale in Melbourne on Tuesday and the market dropped like a stone – down 16-56 cents across the board for the 17-25 micron price guides and with the mid to fine microns hardest hit.
On Wednesday at the WWC – and to a lesser degree at the Sydney wool selling centre – the market followed Melbourne’s lead, plus added some additional buyer disinterest.
The WWC price guides for 18 to 22 micron fleece wools shed between 58 and 96 cents as buyers resisted competing for anything other than the very best lines of the small 3052 bale offering.
The Western Indicator (WI) plunged 74c.
Returned from the 2018 Nanjing Wool Market Conference and visits to Australian wool clients in China, AWEX technical controller at the WWC Andrew Rickwood in his market report noted seller resistance to lower prices.
“Sellers were very reluctant to accept the reduction in price, by the end of the day over 55 per cent of the fleece was passed in,” Mr Rickwood said.
On Thursday, with only 2985 bales on offer, buyers generally halted the price slide and bid up the mid micron wools across the 19-20 price guides to steady the market.
The passed-in rate dropped back to 18pc.
The WI finished the week down 81c at 2141c per kilogram clean, a significantly bigger fall than either the Melbourne or Sydney indicators, or the Eastern Market Indicator (EMI).
Generally accepted as a guide to the strength of the national wool market, the EMI finished the week down 54c at 2013c/kg.
WWC price guides across 17.5-22 micron wools ended up with losses ranging from 59c to 82c for the week.
Passed-in average for the week was 32.9pc at the WWC, compared to 9.1pc in Melbourne and 11.1pc in Sydney.
Compounding a recent lack of interest by buyers on behalf of Chinese processors, or perhaps the reason for it - no one at the WWC is entirely certain of which – is the fact China effectively shuts down for this week.
National Day public holidays in China run from Monday through to tomorrow, Friday.
According to AWEX statistics, so far this financial year China has taken 15 million kilograms or 68pc of Australia’s wool clip.
India and Italy have each taken about 8pc and the Czech Republic 4pc.
The drop in prices and lack of sales, particularly in WA, cut national weekly wool sales turnover to under $70m for only the second time this season.
Last week’s turnover was $69.28m, according to AWEX.
On the other occasion – the week eight August 21 and 22 sales – gross weekly wool turnover slipped below $70m.
Despite the drought affecting wool production volumes in NSW and now South Australia, the volume of wool sold so far this season in WA is significantly less than last season with a greater fall in bale numbers than in Eastern States.
First-time offered bale numbers at the WWC are down 18.5pc to 56,671, reflecting in part a change from spring to autumn as the main shearing season in WA.