Super-fine wool price on rise
DESPITE a large increase in the offering this week which saw just over 53,000 bales being put forward the market was able to absorb the majority of this quantity with 6.9% being passed in.
This represented the largest offering for over a year, since April 2011 in fact, and although the market did show signs of choking on the volume it was able to finish the week with a modest 2% fall in the EMI to close at 1046.
Superfine wools fared best during the sale with rises of up to 30 cents in the 17 micron category, while the medium wools drifted lower and crossbreds and oddments were generally unchanged.
If the market can be sustained for another month the current price level may become a floor from which a further uptrend can be launched. However, if demand remains subdued and the bullish operators take their foot off the pedal we are likely to see a correction before Christmas.
Given the number of competing widespread forces a period of range trading within say 50 to 100 cents for the remainder of the year is most likely.
- Fine Wools: Now at more attractive level and if European consumers can follow the improved sentiment across the Atlantic we should be able to build further.
However, an oversupply by hold wool being pushed onto the market will quickly dampen the recovery as well.
- Medium: A number of forward orders are already filled having been called in early to utilise current year quota, and this may leave a vacuum in the pipeline apart from the subsistence buying from top makers.
- Crossbred: Hand knitting yarn stocks in China are very large, but new outlets in the form of fabric for apparel and upholstery continue to provide some demand.