Wool market makes stunning turnaround

The EMI closed the week at 1535 cents a kilogram, an overall increase of 170 cents a kilogram.
The EMI closed the week at 1535 cents a kilogram, an overall increase of 170 cents a kilogram.

Season 19 - Week 11

Source: Australian Wool Exchange (AWEX)

After showing signs of improvement on the final day of the previous week's sale, the Australian wool market has turned around in stunning fashion, breaking a host of records along the way.

From the opening hammer of the first selling day, it was immediately apparent that buyer confidence had returned.

With the confidence came strong spirited bidding from all major players, resulting in large price increases.

As the sale progressed prices steadily rose, as exporters fought hard to secure market share.

Main buyer focus was on the broader microns, which pushed the individual Micron Price Guides (MPGs) for 19.0-micron and coarser up by 160 to 200 cents a kilogram.

As Fremantle did not sell on Thursday last week, the region did not experience the price rises that the eastern centres enjoyed on that day.

As a result, the western region posted the largest gains of the day, 176 to 235 cents a kilogram.

The western market indicator rose by 198 cents a kilogram, the largest increase since AWEX records began in 1995.

The southern and northern region also posted record increases, 132 cents a kilogram and 126 cents a kilogram respectively.

On the back of these record gains, the AWEX Eastern Market Indicator (EMI) added 130 cents a kilogram for the day, again the largest daily increase in history.

On the second selling day only Melbourne and Fremantle were in operation, as Sydney had a one-day sale.

The reduced offering again came under intense buyer demand and again prices continued to rise.

The MPGs rose by another 40 to 100 cents a kilogram, pushing the EMI up a further 40 cents a kilogram.

The EMI closed the week at 1535 cents a kilogram, an overall increase of 170 cents a kilogram, this was the highest weekly increase in the EMI on record.

As expected, the large price increases have enticed sellers back to the market.

Next week's offering has increased to 31,107 bales, with all three centres in operation.

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