Favourable trade signals boost wool market activity in Australia

Activity at the Fremantle market reflected this optimism, with the Western Indicator recording a healthy gain of 1.5 per cent in US dollar terms.

Pre-sale discussions on the show floor highlighted a significant increase in forward contract availability—predominantly from China. Many new contracts were reported at a notably sharp pricing basis, giving overseas buyers an advantage. This, coupled with already committed business for February and March deliveries, not only augments the supply volume but also influences the composition of the upcoming wool supply, the Australian Wool Innovation (AWI) said in its commentary for week 34 of the current wool marketing season.

Superfine Merino wools finer than 18.0 micron continue to weigh on overall price indicators. Prices for these qualities dropped by approximately 20 to 30 ac/clean kg, with some lower specification types—largely the high CVH per cent sale lots—falling away by 40 ac. In contrast, their broader Merino (>18micron) counterparts largely held their ground despite adverse forex pressure. Notably, higher quality lots in the 19-to-20-micron range even strengthened as tougher growing conditions in many areas impacted wool quality.

February typically sees a high-volume supply of these superfine wools. However, this year the influx has coincided with lacklustre demand from the Italian markets. Additionally, dry conditions in several superfine growing regions have led to quality issues – particularly in tensile strength – causing some clips to miss their usual processing routes in Italy. Despite these challenges, the few best spinner clips on offer attracted substantial premiums – exceeding 200 ac – from Italy’s luxury weavers, the AWI commentary added.

The buying activity was led by the two largest Chinese top makers, who had to lift levels to stay competitive later in the week. Looking forward, 41,000 bales are set to be offered next week across all three centres on Tuesday and Wednesday, setting the stage for further market developments.

ALCHEMPro News Desk (KD)