Prices ease before wool buying recess

Prices ease before wool buying recess

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Western Wool Centre technical officer Andrew Rickwood said the frenzied buying on the first day of trading last week was not repeated on the second day.

Western Wool Centre technical officer Andrew Rickwood said the frenzied buying on the first day of trading last week was not repeated on the second day.

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"The Fremantle fleece market has followed the lead of Melbourne, realising the gains experienced last Thursday," said Australian Wool Exchange (AWEX) technical director at the WWC Andrew Rickwood in his market summary at the end of the day.

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HEADING into a three-week break in live wool auctions, prices at the Western Wool Centre (WWC) last week played catch up initially, then eased back as last orders were filled and a holiday mood took over.

The main wool auctions centre in Melbourne had traded on its own on the Thursday of the previous week to clear a massive 51,260-bale national season-opening offering and had recorded good demand and some solid price rises for particular micron segments despite the volume of wool available that week.

Opening day sales at the WWC last week saw similar good demand continue and prices moving up across the gap to Melbourne levels after the Melbourne market again opened firm two hours ahead of the WWC.

"The Fremantle fleece market has followed the lead of Melbourne, realising the gains experienced last Thursday," said Australian Wool Exchange (AWEX) technical director at the WWC Andrew Rickwood in his market summary at the end of the day.

The 21 micron price guide was the best performer, adding 53c, while across the 18-20 micron segments guides put on between 20c and 31c.

While keen to get orders finalised before the annual recess, buyers were still circumspect in what they bid on.

Of the relatively large 5575-bale offering on the first WWC trading day last week, buyers passed in 22 per cent of the fleece bales.

They had seen 27.5pc of the bales up for auction before and were no more impressed the second or third time around than they were the first time they saw them.

But by the second day the WWC market had caught up to Melbourne and began tracking down with it, as buyers completed orders and demand dried up.

Buyers did not want to hold part-completed orders over the recess because they have to pay for the wool already bought, plus storage costs on top for the three weeks until they can buy more wool to fill shipping containers and send them on their way before they get paid.

"The frenzied bidding of yesterday was not apparent today, resulting in prices being achieved slightly below those reached in the previous sale," Mr Rickwood said in his market summary for the second trading day last week.

All micron segments were affected, with falls of between 5c and 10c.

"The price reductions have been met with seller resistance, pushing the passed-in rate above 20pc," Mr Rickwood said.

While the offering on the second day was back down to 3584 bales, more than a quarter of it had also been put up before and rejected by buyers before bidding reached prices sellers wanted.

Brokers have suggested high proportions of reoffering are likely to continue for some time once live auctions resume after the recess, as they try to manage new season supply from spring shearing while selling down a stockpile of wool that failed to sell last season after the COVID-19 pandemic hit.

The Western Indicator finished the week up 20c at 1462c per kilogram clean, compared to the benchmark Eastern Market Indicator which was up 8c to 1428c/kg.

The WI is now only 15c shy of its top level for the previous season which was achieved in the middle of last month when all of the fleece price guides hit their top for the season.

Price rises for fleece segments finished up for the week by between 43c (to 1346c/kg for 21 micron) and 6c (to 1612c/kg for 19.5 micron).

The Merino cardings guide put on 2c for the week to finish at 977c/kg, already 1c dearer than its best price last season.

Local traders PJ Morris Wool and Westcoast Wool & Livestock and national trader Techwool were the major buyers both days but swapped positions at the top of the WWC buyers' list over the two trading days.

Live auctions will resume at the WWC in the second week of August.

WoolQ has scheduled a digital wool auction for 11am Thursday, August 5 and has a WA specialty wool auction listed for Tuesday, August 24, after live auctions are completed in the Eastern States.

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