The wool market has fallen to its lowest point since November 14, 2018, when the AWEX Eastern Market Indicator (EMI) fell to 1768 cents a kilogram, or in US dollar terms 1277c.
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Last week the market fell 31c and 10c on Wednesday and Thursday respectively to land at 1823c/kg or 1260c/kg in US dollar terms.
The finer end of the market saw the largest loses as little business was done with overseas mills. While, quality lines of high strength wool saw premiums as unsurprisingly dusty, drought affected wool continued to enter the market.
The market is 198c cheaper than this point last year. The global economy has been blamed for the weakening market.
The US-China trade war is causing many economies to weaken and thus impacting on demand globally. While woollen garments from China are not impacted by US tariffs, consumer confidence is still very weak.
The market retraction did not miss the online market, with 35 bales selling on AuctionsPlus Wool.
A line of AAA Merino 15-micron fleece wool offered by Australian Wool Network was the top price lot online. This line branded WARRAH, was 71mm in length, had the very low 0.7 per cent vegetable matter, and sold for 1650c/kg (greasy) or 2276c/kg (clean).
While crossbred wool was topped by a line of 28.6-micron fleece wool for 780c/kg (greasy) or 1066c/kg (clean).
There is a limited offering this week, with the WA market closed, thus there is an estimated 19,000 bales to be offered.
The sentiment for the auctions is mixed, at some point the overseas mills will need to buy again. However, the price point at which they will conduct business again is unclear.
Further to this, the traditional July recess for the wool auctions is on the horizon. Between July 15-August 5, the physical wool auctions will close, meaning mills need to ensure their stocks will be able to cover the break.
