Indicator slips 9c/kg and settles at 1568c/kg

Australian wool market deflects fears over impact of coronavirus

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It remains to be seen whether the non-Chinese mills will keep their current pace post coronavirus.

It remains to be seen whether the non-Chinese mills will keep their current pace post coronavirus.

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After speculation over how and when the coronavirus would impact the Australian wool market, the market has actually held its own.

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After speculation over how and when COVID-19 would impact the Australian wool market, the market has actually held its own, offering stability to the industry.

Across last week the AWEX Eastern Market Indicator lost nine cents a kilogram to close off at 1568c/kg, or in US dollar terms at 1054c/kg, while the West Australian indicator fared worse losing 42c/kg to close off at 1667c/kg.

It was reported that good quality wools received strong support from buyers last week, however the large quantity of drought-affected types were discounted.

Due to Australian wools' reliance on China, COVID-19 has been viewed as a potential thorn in the market's side, but as yet this has not come to fruition.

This has been in part to non-Chinese processing mills stepping into the market, reports of European, Indian and Middle Eastern buying has stopped any market free fall. In addition to this, last week saw an average of 22 per cent pass-in rate at auction.

This signals that the current offering is just meeting market demand.

Online, AuctionsPlus Wool saw buyers sourcing wool outside of the auction with 237 bales selling across the week. 17 and 18-micron fleece wool sold up to 1327c/kg and 1295c/kg (greasy) or 1869c/kg and 1806c/kg (clean), while 19 and 20-micron fleece wool sold up to 1350c/kg and 1020c/kg (greasy) or 1774c/kg and 1686c/kg (clean).

The top priced lot across all wools online last week was a line of 15.4-micron Merino pieces, the lot had a very low 0.9pc vegetable matter and was 68 millimetres in length. This lot was branded FINCHLEY/CRAIGIE, offered by Jemalong Wool and sold for 1405c/kg (greasy).

Looking forward, there is an estimated 39,000 bales to be offered across all three selling centres.

The short to medium outlook for the wool market is positive, once China steps back into production post COVID-19, no doubt there will be a price rally.

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