WA’s wool market bounced back from a minor correction with record prices for finer wools as live auction trading at the Western Wool Centre (WWC) returned to relative normality last week.
The week nine sales on Wednesday and Thursday were only the third two-day weekly sales so far this this season because of an annual recess and low wool stocks resulting in some one-day sale weeks and no sales at all the previous week.
Ostensibly the week’s trading break at the WWC was to allow interested WA wool brokers and buyers to attend Wool Week activities in the Eastern States, according to the Australian Wool Exchange (AWEX).
But the effect was to allow extra time for wool to start trickling into empty wool stores - record prices at the end of last season saw what was left of stockpiles sold off – after a rain-disrupted start to spring shearing.
While it is not clear how many WA buyers and brokers took advantage of the break to go East, the affect on bale numbers accumulated over the extra time and offered for sale last week was abundantly clear.
At 10,427 bales, it was the largest combined two-day offering at the WWC so far this season and the largest since week 41 of last season – April 11 and 12, towards the end of Autumn shearing which now produces more wool in WA than spring shearing.
Because of low wool stocks, regular two-day weekly sales have not been a consistent feature of WWC trading since the middle of May but, barring further rain delays to shearing, they are scheduled to continue on from last week until Christmas.
Not that last week was entirely back to normal.
Melbourne and Sydney wool markets had traded and lost ground in the week the WWC had off, so when trading resumed on Wednesday last week WA wools played catch up and prices took a dive.
Broader microns were hardest hit with the 20 and 21 micron price guides dropping 95 and 89 cents per kilogram clean (respectively) on the Wednesday.
There was a chance the WWC market could continue easing on Thursday.
Although the Sydney market – trading three hours earlier than Perth – recovered and prices were up, a massive factory fire in Melbourne’s western suburbs forced the closure of the wool selling centre in the same block on Thursday.
According to AWEX, postponement of the Thursday sale in Melbourne to Friday was only the third Friday sale since AWEX took over national wool sales in 1995 and the first time a scheduled sale had been postponed since the 2001 9-11 terrorist attack in New York.
Normally trading companies which buy wool across the three selling centres use the later sales at the WWC to top up orders partly filled from larger offerings in Melbourne and Sydney or use a price difference between the selling centres to average costs across a shipment, which can add significant demand at the WWC.
But with Melbourne selling on Friday some buyers and brokers suspected both those potential demand and price drivers might be missing from WWC sales last Thursday, but that seems not to have been the case.
Wool prices rebounded with records set by the 18 and 18.5 micron fleece price guides at 2620 and 2523c/kg respectively.
Increases by the other micron guides were less substantial with the WWC wool market ending the week with prices generally down overall from August 15 records but heading back in that direction.
Merino cardings, which experienced unprecedented demand at the start of the year but have generally failed to attract much enthusiasm since, were back in favour both days last week.
On Wednesday they defied the fleece price correction and climbed 61c instead, then added a further 4c on Thursday to finish at a record high of 1599c/kg.
While still a long way short of its August 15 record, at 2255c/kg the Western Indicator – a general guide to the strength of WA’s wool market – is now 12c/kg more than it was at the start of the season with a then record price since superseded.
Peter Scanlan Wools buyer Steve Noa said he did not think any buyers held off on Thursday because of the Melbourne sale the following day.
“I don’t think it (postponed Melbourne sale) made any difference, buyers had to buy to get wool,” Mr Noa said.
Techwool Trading buyer Russell Fraser also said he did not think the postponed Melbourne sale had any material impact in WA.
“Other than we’re normally looking over their (Melbourne wool buyers’) shoulder and this time they were looking over ours, I didn’t detect any difference,” Mr Fraser said.
“We knew early (Thursday) that Melbourne wouldn’t open and they (AWEX) had a contingency plan to shift the sale to Geelong if they couldn’t get back into Melbourne (selling centre) on Friday.
“So we knew there was only a one day delay and that wasn’t a problem.
“If it had been for a week, then that might have created a much bigger problem impacting on trucking and possibly shipping schedules.”
The better quality offering at the WWC on Thursday also helped negate any potential negative impact from Melbourne, he said.
“We are seeing a more consistent supply of finer styles and better specification wools than we used to,” Mr Fraser said.
He pointed out the Australian dollar sliding to its lowest point in 18 months against the US dollar also helped traders and their Chinese clients by absorbing the price rises while maximising woolgrowers’ returns.
“PHENOMENAL” was how Wannamal woolgrower Nick Smith described the prices his Fauna Park wool achieved at the Western Wool Centre last Thursday.
“We’ve had a third highest price for the day once before with one line but the rest of the clip was nowhere near that, this time all the lines have achieved phenomenal prices,” Mr Smith said.
His five fleece lines sold to a top of 2090 cents a kilogram greasy, almost hitting the magical $30 a kilogram clean level some pundits see wool prices going to.
A lighter cut than usual because of seasonal conditions produced just on 50 bales from a main shearing in August which avoided rain hold ups.
Mr Smith said he was very happy with the quality of the wool which was very sound despite a dry start to the year and averaged 69 per cent yield.
His fleece wool ranged from 16 micron for hoggets to 17.5 micron, was 90 millimetres or longer in staple length and tested at 40N/kt strength.
“We were hand feeding for a long time and were quite late with our break as well, on May 24, so we were really pleased with the wool.
“We noticed the younger sheep struggled a bit with the conditions – the older ewes did really well but the younger ones struggled.
“But we’ve had good rains now and we’ve got feed,” he said.
Father and son, Beau and Gary Repacholi, Kondinin, also got the best prices they have ever achieved for their wool last Thursday.
“We’ve never done better than that,” Beau said after the five lines of fleece wool sold to a top of 1534c/kg.
The Vermontdale fleece wool averaged 20.5 microns, 90mm staple length, 66.7 yield and 40N/kt strength from a main shearing at the end of July which produced 75 bales.
“We had a bit of a slow start – a very dry start – to the season, but it’s evened up now, July and August were very good,” Beau said.
“It was pretty good wool considering we were hand feeding for a long time even though we had summer rains.”