As detailed by Mecardo previously, the shift in supply towards
a finer average micron in early 2024 has been contributing to the steeper price
declines in finer micron categories. This
financial year, 17MPG in Melbourne has lost 140 ȼ/kg; 21MPG in Melbourne is 12ȼ
higher in the same period. In Figure 1 we can see the 17 MPG in Melbourne
approaching the 21MPG and the basis between the both has come in considerably
in the last 12 months as a result, (a decline 475ȼ or 52% lower).
This week In Sydney, 17MPG lost
5ȼ to 1757ȼ/kg and In Melbourne, 17MPG lost 9ȼ to 1755ȼ/kg. 20MPG in Sydney
improved 6ȼ to 1348ȼ/kg and 21MPG in Melbourne gained 2ȼ to 1321ȼ/kg.
Demand for wool has been a bear that refuses to be poked. Signs
of economic recovery that the wool trade has been searching for, are yet to
appear. In an easing market, bidders will still be eager to secure stock, but a
momentum shift is needed to push prices up. This week’s demand was steady with a
consolidation of volumes sold (just a 1.7% decline Week on week) and an
unchanged pass-in rate (steady at 9.5% nationally).
Whilst total wool supply doesn’t necessarily impact the relative
performance of individual micron categories, auction offerings have been ahead
of schedule this season, contributing to an easing market. This could be about to change, a month ago
total season offerings were 6.7% higher year on year, this week the number is
just 1.6% higher than last year. Further
to this, offerings and volumes sold are typically higher at this time of year
(see Figure 2).
Wool market catches its breath
Next week
With the foot off the gas momentarily for auction volumes, it will be interesting to see if this has an impact on the rate of the fine wool premium declines. It is likely that premiums will still receive some downward pressure as we move forward, but the peak periods of this pressure are likely to dissipate after Quarter 2.
Sydney’s designated superfine sale will be watched keenly to identify whether fine wool premiums continue to decline steeply or are approaching a steadier state.
Have any questions or comments?
Click on graph to expand
Click on graph to expand
Click on graph to expand
Data sources: AWEX, AWI, Mecardo
Categories
Have any questions or comments?
Fibre prices
A reader has asked whether synthetic fibre prices have settled down, implying there is an equilibrium price level for these fibres. That implication is not
Price stable as offering declines
A lower bale offering helped the Australian wool market set a very modest overall price rise, with the Eastern Market Indicator (EMI) up by 1¢
Merino supply and price
Supply is the topic of the moment in discussions about the greasy wool market, or more accurately low supply and its impact on price. Supply
Sellers unwilling to part with wool at current market
This week prices fell in the Australian wool market and pass in rates remain high as volumes have been slowly creeping back up to 30,000
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