Market Morsel: Meandering Merino prices

Fibre | 15th November 2021 | By Andrew Woods

Market Morsel

Medium and broad merino prices continue to meander along within the price range established through 2021. When prices fall to the lower side of these ranges buying interest picks up, as it did later this week. Interest in passed in lots on Thursday in Melbourne was good – mainly for medium-broad merino, with many lifts above the passed in price.

There may be an element of shipping deadlines involved with such activity but it is a positive sign for next week. There was some mention of a revival in interest in superfine wool which is likely to slow the rate at which the fine wool premiums shrink back to more sustainable levels. The gap in price between the 17 and 21 MPGs has slipped by a couple of hundred cents since July but remains at high levels.

On the broader side of the merino micron distribution, the gap between the 21 and 19 MPG has narrowed by 120 cents since July and still remains wide by the standard of the past two decades. While the bulk of the merino market may be drifting along in terms of price, there is plenty of change going on in relative prices within the market.

17 Micron

Fine micron premiums have eased in recent months, which might help demand. The premiums had blown out sharply since mid-2020, no doubt upsetting the plans laid down by the supply chain in 2020. European demand, especially knit ware, is reported as ticking along nicely which is good news for shorter length wool, pieces/bellies and low strength fleece wool.

19 Micron

Active interest in passed in lots after sale this week and some new business later in the week points to at least a solid market next week. Staple strength is tracking at good levels in both the east and west currently which will help limit the discounts for low staple strength/high mid-point break that usually turn up mid-season.

21 Micron

South Africa continues to report sizeable premiums for RWS accredited wool across their micron distribution (17 to 22 micron). It looks as though the premiums are a flat US250 cents (or thereabouts) regardless of micron category which makes for a larger proportional premium for broad merino wool. In the short term the market looks likely to continue along at current levels, plus or minus some.

28 Micron

There continue to be some positive comments for crossbred wool, enough to at least to stop prices from falling in relation to broader merino prices. There has been some reports of increased demand for carpet wool in China (no doubt driven by the extremely low price levels) which will help on the broader side of the crossbred distribution.

Provided by Elders Wool. Prepared by Andrew Woods (Independent Commodity Services) with contributions from the Elders wool team.
Photograph courtesy of @krisifrost

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