Strong demand pushes up WA wool prices

Strong demand pushes up WA wool prices

Wool
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Prices have continued to stay high for WA wool.

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DEMAND for WA wool shrugged off the biggest live auction selection so far this season and continued to power prices upwards at the Western Wool Centre (WWC) last week.

Based on increasing small volumes of superfine and ultrafine wools coming onto the market at the WWC, Australian Wool Exchange (AWEX) last week began quoting a micron price guide for 16.5 and 17 micron wools in its regional market summary west and for the WWC in national weekly wool market reports.

While this brought the WWC into line with Melbourne and Sydney selling centre reports, it also technically created two new AWEX price records at the WWC last week.

The 16.5 micron price was listed at the end of the week at 2695 cents per kilogram clean and the 17 micron price at 2636c/kg, both inaugural records.

But it was the other end of the micron spectrum where buyer interest mainly was aimed.

The 19 micron price guide climbed 36c for the week to 2383c/kg as the best performer and the 21 micron guide added 32c to finish at 2334c/kg and closing back in on the record it set on the Wednesday of the previous week.

Micron price guides for 20 and 19.5 wools put on 20c and 18c respectively for the week with Thursday clearly the best of the two selling days for all but 19 micron and Merino cardings wools.

Cardings was the only price guide out of favour last week, losing 18c on Thursday to finish down 6c at 1183c/kg.

Compared to last year’s WWC week-35 sale, Merino cardings is the only price guide to have gone backwards in the 12 months.

After week 35 sales last year it was 1284c/kg.

All of the other WWC micron price guides ended last week between 67c (18 micron) and 405c (21 micron) above where they were after the same sale last year, AWEX statistics showed.

The Western Indicator (WI) finished 16c up for last week at 2177c/kg, in stark contrast to the Melbourne and Sydney indicators and the benchmark Eastern Market Indicator (EMI) which all retreated 11c/kg.

The WI bounced back up above 2000c/kg at the end of November and has been significantly ahead of the Melbourne and Sydney indicators and the EMI for all of this season so far.

While some individual micron price guides, generally at the finer end of the spectrum, at either Melbourne or Sydney selling centres are higher than at the WWC, the regional indicators are a good guide to the relative overall strength of WA’s wool market compared to the eastern markets which have struggled to clear volumes of tender drought-affected wools.

For comparison, the EMI finished last week at 2016c/kg, the Melbourne indicator at 1987c/kg and the Sydney indicator at 2063c/kg.

But both Melbourne and Sydney wool auctions had lower pass-in/no-bid rates, at 9.1 per cent and 5.4pc respectively, than the WWC’s 10pc last week, possibly indicating WA buyers were able to be more choosey, given the larger than usual selection on offer.

With 6205 bales under the hammer on Thursday, taking the weekly offering to 11,507 bales, it was the biggest daily and weekly wool selections on offer at the WWC since April last year, according to AWEX.

“The large selection, high prices and good clearance rate (93 per cent for fleece) helped push the amount of wool sold today to $13,704,051,” said AWEX technical controller Andrew Rickwood in his market summary of Thursday’s trading.

He noted the WWC prices held up on Thursday for the three hours of trading after the much softer eastern markets had closed for the week.

The offering at the WWC this week is expected to return to 8819 bales in a smaller national offering of 46,128 bales, according to AWEX. 

p After a brief increase in January from post-harvest shearings, WA wool volumes tested in February returned to a slow decline trajectory.

Australian Wool Testing Authority (AWTA) statistics for February show its Bibra Lake facility tested 42,705 bales, a four per cent decrease on the number tested in February last year.

Nationally, the decrease in wool volumes tested in February year-on-year was 5.9pc, a significant improvement on January’s 12.5pc decline.

AWTA statistics show the main drought affected States of New South Wales and Queensland continued to struggle to produce wool but volumes tested in Victoria and South Australia recovered in February compared to January.

So far this season in WA AWTA has tested 255,995 bales, an 8.9pc decrease on the same period last season.

Nationally, the bale test count so far this season is down 11.2pc to 1.23 million.

The volume of superfine wools 16.5 micron and finer tested in WA so far this season has jumped 69pc, from 707.6 tonnes in the same period last season to 1196t this season.

Superfine wool tests between 17.6 and 18.5 micron have jumped 22.3pc to far this season to 11,278.6t, up from 9219.2t in the same period last season.

Ultrafine wool tests have also increased significantly on the same period last season but volumes remain small in WA.

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