BOTH favourable and adverse reaction to international agreements involving Australia last week saw the local wool market take a bet each way on where trade tensions with China will go.
On the first trading day at the Western Wool Centre (WWC) last week - the same day China indicated displeasure at Australia and Japan signalling greater military co-operation under a landmark reciprocal access agreement to counter rising Chinese aggression in the South China Sea - prices dropped across the board.
The second trading day - after further details of the world's largest free trade agreement, the Regional Comprehensive Economic Partnership (RCEP) signed by Australia, China, Japan, South Korea, New Zealand and the 10 Association of South East Asian Nations trickled through - prices clawed back a portion of the previous day's losses.
While Australia already has free trade agreements with RCEP countries, the local wool industry is expecting flow-on benefits from tariff removal on Chinese-processed wool, particularly yarn and wool top, exported to other manufacturing countries which are now RCEP signatories.
Free trade in yarn and wool top between China - the main global early processor of greasy wool - and manufacturing nations such as Japan, South Korea and Vietnam and emerging nations such as Myanmar, has the potential to maintain or even increase volumes of Western Australian fine Merino wool going to China, our biggest-by-far greasy wool customer, the industry believes.
Seemingly to endorse this industry belief, Tianyu Wool, the wholly-owned Australian subsidiary of China's Tianyu Wool Industry - the world's largest vertically integrated 80,000 tonnes-a-year wool scourer and wool top maker - bought more Australian Merino wool last week than any other exporter.
Tianyu's buying activity was also noted by Australian Wool Innovation in its week 21 market report, but without naming the company.
Australian Wool Exchange (AWEX) statistics from the WWC and Melbourne and Sydney selling centres showed Tianyu purchased a total of 4116 bales, including 3003 bales of fleece wool, across the three auction centres last week.
National trader Techwool Trading was next biggest buyer, with 3319 bales all up, followed by Melbourne-based exporter United Wool Co with 3174 and another national trader Endeavour Wool Exports in fourth place with 2551 bales.
At the WWC, Tianyu's buyer Dave Cox, renowned for capitalising on falling markets, purchased 315 bales on the first trading day - sufficient to push Tianyu up to third place on the WWC buyers list that day - and a further 111 bales the next day.
AWEX trading statistics show Tianyu Wool so far this season is in fourth place on the national wool buyers' list, having bought 38,968 bales, or 8 per cent, of the national offering.
In third place is Chinese-controlled Lempriere Australia with 40,990 bales (8.4pc).
The position of these two Chinese-owned companies so close to the top of the national wool buyers' list suggests reports wool is at risk of joining a list of commodities China no longer wants to import from Australia, may be overblown.
Endeavour with 55,785 bales (11.4pc) and Techwool with 64,972 bales (13.3pc) are, according to AWEX, second and top respectively on the buyers' list.
Both rely on Chinese clients for the bulk of their export business.
Irrespective of trade tensions and free trade agreements, defiant WA woolgrowers have their own ideas of what their wool is worth and, with good prices for sheep and cereal crop harvests looking better than first expected, some are prepared to hold onto it until demand improves and the market steadies.
That was demonstrated at the WWC last week, particularly on the second trading day.
It was obvious woolgrowers, in conjunction with brokers, had determined what they thought their clips were worth and they were not prepared to budge.
From wool stencil names on the screens displaying auction results, it appeared whole clips were passed in despite spirited bidding between buyers that ultimately failed to reach reserve prices seemingly set in concrete.
It is unusual this season to see wool lines passed in at 1180 cents per kilogram greasy, but it happened last week.
Auctioneers acknowledged they started the bidding low and were often working hard to call prices which, in many cases, fell short of a sale because reserves had not been adjusted.
A fleece pass-in rate of 27.8pc was recorded on the first day, after 143 bales were withdrawn before the auction, leaving an offering of 2517 bales.
Highlighting woolgrowers' determination to achieve the value they want was a fleece passed-in rate of 33.8pc in a firm market on the second day.
They pulled 345 fleece bales out before the start - even though the Melbourne and Sydney markets had opened firmer three hours earlier - leaving an offering of 2157 bales.
The Western Indicator finished the week at 1212c/kg greasy after shedding 33c then claiming back 4c.
The finer end of the micron spectrum fared better with losses ranging from 23c (18 micron) to 30c (18.5 and 19.5 micron) for the week.
Mid-micron losses were 33c for 20 micron wools and 34c for 21 micron wools.
Merino cardings finished down 9c for the week.
Overall, the WWC wool market generally retained its recent in-between position relative to Melbourne and Sydney wool markets - slightly higher than Melbourne and slightly lower than Sydney.
This week the WWC is listing 7698 bales for auction over the two days, 794 more than were actually offered last week.
Nationally, AWEX is scheduled to offer 41,527 bales, 5195 more than it offered last week.
But, taking their lead from WA woolgrowers the week before, woolgrowers from the Eastern States last week withdrew 7.6pc of the wool listed for auction in Melbourne.
In view of the 14pc jump in national bale numbers scheduled for offer this week, it seems likely significant numbers of bales will also be pulled out before auctions start this week too.