“MANIC” was the word a wool buyer used to describe last week’s one-day sale at the Western Wool Centre (WWC) where price records were set for the fifth consecutive trading day.
The Western Indicator (WI), a general guide to the strength of the WA wool market and which had sat at 1939 cents a kilogram clean after the first trading day this month, crashed through 2100c for the first time on Wednesday to finish at 2119c/kg.
The full spectrum of micron price guides from 18 to 22 also set records for the third straight sale and the 17.5 micron guide set a second consecutive sale record.
Australian Wool Exchange (AWEX) technical controller at the WWC Andrew Rickwood noted in the customary understated tone of his regional market summary that the local fleece market “continued its journey into uncharted territory”.
“Prices opened 20 to 50 cents dearer then slowly but noticeably increased as the sale progressed,” Mr Rickwood said.
But Modiano Australia Pty Ltd wool buyer Greg Horne had a different perspective.
“You’ll only need a one-word headline to describe today – manic,” Mr Horne told Farm Weekly as he left the WWC after the close of trade.
With only 4641 bales on offer – almost a third less than the week before – the usual two days of live auctions at the WWC were “dumped” into one sale.
It opened with strong bidding, as Mr Rickwood stated, but with a noted lack of participation by Seatech Industrial buyer Alan Brown who took his usual seat in the back corner of the sale room next to Lempriere Australia buyer Perry Roberts, but rarely shouted a bid for about the first quarter of the sale.
A canny buyer who dislikes paying high prices for average specification wools, it is not unusual for Mr Brown to sit out a rising market.
But Seatech — previously known as Chinatex – is one of the biggest exporters of Merino wools into China and about the time wool markets were closing in Melbourne and Sydney Mr Brown stepped out of the sale room briefly to make or take a phone call.
On his return he jumped into the bidding and by the end of the sale had booked up the most bales, with Seatech taking 865 or 19.2 per cent of the offering.
Other major China exporters, Techwool Trading and PJ Morris Wools, were the next biggest buyers, taking 14.1pc and 11.6pc respectively.
Since wool broker delegates returned from the 87th International Wool Textile Organisation (IWTO) annual congress in Kowloon, Hong Kong, recently, talk at the WWC has been about the possibility of a further price spike.
“If you think prices are high now, you ain’t seen nothing yet,” is a comment Farm Weekly has heard from brokers from different companies and at least one wool buyer, but it could possibly be attributable to the same source at IWTO.
That predicted perfect storm could face buyers at the WWC this week.
It is a one-day sale again with an even smaller offering – 4385 bales out of a slightly larger national offering of 31,336 bales.
At the close of last week’s WWC sale on Wednesday, WA’s mid-micron wools were on average the most expensive in the country – WA price guides for 19-22 micron wools overtook Melbourne and Sydney prices the week after the Easter recess in April.
Since then, WA prices have generally been in front of the main Melbourne market in a case of the tail wagging the dog.
But Melbourne and Sydney wool markets traded last Thursday when the WWC was closed.
That extra trading day put WA mid-micron prices, which on Wednesday night had been between 5c/kg and 36c/kg higher, suddenly up to 30c/kg behind Melbourne and Sydney prices.
In comparison to the Eastern States markets, WA mid-micron wools went from being the most expensive to the cheapest in the country in a day, so buyers and brokers are expecting an element of demand-driven catch-up to push prices higher, at least initially, this week.
Compounding the issues of one-day trade, small offerings and likely catch-up price push for buyers, is also the fact there are no wool sales at the WWC next week.
It is closed for weeks 49 and 51 of the season because there is insufficient wool available to warrant sales.
Buyers looking to complete export order shipments of wool before the end of the financial year have only this week and two more trading weeks at the WWC to do it.
