Curtis Wool Direct

AWI Australian Wool Market Report

Buy and sell wool 24 hours a day, 7 days a week from anywhere in the world. Click here.

After a rather sluggish start to the selling week at Australian wool auction sales, the market showed some signs of positive activity on the final day. The signals were all negative on the first day of operations and prices drifted as the market looked for a level at which new business could be conducted.

By day’s end levels on all wool types and descriptions were trading 30ac/clean kg lower. It was being widely reported that better trade opportunities existed, not only from China, but India and Italy as well.

Those encouraging signs were immediately transferred into the sale rooms with a handy 20ac recovery in prices, and almost eliminating the losses of the previous day. The AWEX EMI (eastern market indicator) finished the week at 1558ac/clean kg which was 14ac or 0.9% lower. A similar softening of the EMI when expressed in USD occurred with a 0.8% or 10usc/clean kg devaluation. Still, these levels remain in heady territory being 18% higher in AUD and 24% higher in USD compared to the wool values being paid at the same period last spring.

Being a designated super fine sale in Sydney, it was highly motivating for growers of those traditional spinners types to receive the significant premiums they extracted from the market. In the individual micron categories of 18.5 micron and finer, it was commonplace for prices to be at least two dollars per kg above that of their top making styled counterparts.

The truest of the spinners types fared even better, with three to four dollar per kg premiums being paid. Whilst Chinese and trader interests provided some healthy competition, the Italian interests exercised their buying strength and bought almost the entire selection, apart from the odd lot or two. It appears that Chinese wool interests are well and truly intent on bringing back the premium to traditional super fine wools. The buying patterns emanating out of that country and indeed other wool-processing nations, appear to be strengthening as more mills are setting their sights on filling their supply chains whilst the good volumes of wool are coming onto the market.

The last six months has seen some weaker periods in the market, which is most likely understandable at these levels, but in almost all instances, the weakness lasts just a week or two at best. Following surges in the market we seem to be experiencing a short lull, then a swift retreat and then a steady recovery which inevitably places the market average price above that of the previous surge. Exactly when this trend changes is unknown and now likely dependent on the willingness of the consumer to keep buying wool at retail.

The general Merino fleece and skirting market tracked similarly this week, with 18 micron and finer par to 20ac dearer and types 18.5 and broader 5 to 20ac lower. The West values played catch up after having last week off, hence the larger falls recorded. Crossbred (26 to 30 micron) wools sold 30accheaper again and cardings averaged prices of 15ac lower. Auction sales next week in Australia have on offer around 43,000 bales. Sales concluded strongly this week so hopefully that is a good insight as to the fortunes on next weeks’ activity.

It was a remarkable week for the Aussie Dollar, with a rally to a high of .7995, and a failure to break .80 cents, being swiftly followed by a 120 point fall that afternoon, to an overnight low of .7870, before a late 70 point surge to .7945 on a sell-off in the USD.

The USD fell as global traders saw the Korean conflict ease, and there was position squaring ahead of tonight’s all important U.S Employment Report. The trigger to USD fall overnight was the surprise to the Federal Reserve’s measure of price pressures which rose by just 1.4% in the 12 months to July, leaving it at the lowest level since December 2015, and takes it further away from the Fed’s 2% inflation target.

The USD was also undermined by comments from US Treasury Secretary Steve Mnuchin that a weaker USD was “was better for Trade”.” In a sense it was business as usual for 2017’s main themes of USD selling, Bond buying and a rally in Equities. The S&P500 lifted in overnight trade to just under its record high, as Global stocks capped off August with their 10th straight month of gains. Meanwhile the USD Index which measures the USD against a basket of six major currencies, fell for sixth straight monthly decline in August.

The lift in global Commodities this week is seen as supportive for the Aussie, and Friday’s release of Australian Manufacturing data surprised showing the fastest expansion in 15 years, and also backs this week’s ABS Data release showing a surge in Business Capital Expenditure numbers.

Technically AUD/USD is seen as capped at 80 cents, with medium term support at .7850. Price actions show a developing consolidation pattern. The Charts suggest a further rise is now likely.

Source: AWI

Share This Article

New Zealand
South Africa
Wool Promotion
Buy Alpaca from
Wool & Specialty Fibre
Tops & Yarn Dyeing
Wool & Top Treatment 
Buy Yarn From
Textile Machinery
Wool Magazines

Interested in reaching buyers in China? Advertise in wool2yarn China magazine and reach major importers of wool and speciality fibre, topmakers, spinners, weavers and textile companies in China, in their own language, breaking down the language barrier. This publication is circulated to 5000 major textile companies in China, Hong Kong and Taiwan and is a buyer’s guide and information source for the year ahead. See More.

Reach buyers in 58 countries – advertise in wool2yarn global magazine. Published once each year (September) it is circulated to over 5000 textile companies. Readership includes importers of wool and speciality fibre, topmakers, spinners and weavers, manufacturers of yarn, knitwear, carpet, and blankets, producers and importers of fabrics, bedding products, garment manufacturers, and brands and retail chains. See more.

Wool Reports
Buy Wool, Wool Tops, Yarn Online
Wool Testing
Wool Grease
Wool Products Online
Second Hand Textile Machinery