China re-enters the market and the market strengthens!
After showing signs of improvement midway through the previous sale, the Australian wool market has continued to recover strongly in Week 21. 31,889 bales were on offer to the trade and from the opening lot it was evident that buyer confidence had returned. Spirited bidding was displayed across all types and descriptions as buyers fought hard to secure quantity.
The benchmark AWEX Eastern Market Indicator (AWEX-EMI) rose by 46 cents (the largest daily increase in three months) on the back of increases in merino types of 50 to 70 cents. The strong demand noted on the first day continued into the second, pushing prices higher again. Fleece wool was generally selling at levels 30 to 40 cents above those achieved on the previous day, sending the EMI up by another 31 cents. By the end of the series the EMI had risen by 77 cents, closing the week at 1858 cents.
The skirtings also posted increases for the week but not to the same extent as the fleece. General gains of 40 to 80 cents were realised with wool carrying less than 2.0% of vegetable matter being most affected. The crossbred sector continued with their recent rally with prices generally 50 to 80 cents higher. The finer microns experienced the largest increases, jumping as much as 100 cents. The oddments also sustained their recent revival with further increases of 25 to 80 cents this week, adding to the gains from the previous series. After eleven consecutive weeks of falls (when it lost 566 cents), the national average of the Merino Carding Indicators added 67 cents this week on top of the 89 cent rise last sale.
Quantities increase slightly in week 22; currently there is 36,447 bales on offer next week in Sydney, Melbourne and Fremantle.