Wool continues to avoid coronavirus angst

Wool continues to avoid coronavirus angst

Sheep
Market observers will no doubt be curious to see if wool prices can continue to defy the broader market trend, as a result of coronavirus concerns.

Market observers will no doubt be curious to see if wool prices can continue to defy the broader market trend, as a result of coronavirus concerns.

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Prices rise across most of the wool on offer for the week.

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As global supply chains continue to be weakened by the threat of a coronavirus outbreak, one would expect a weaker demand for premium products such as wool. This, however, has not been the case, as prices rose across most of the wool on offer for the week.

One possible explanation is the January retail sales figures, which have shown a stronger demand for clothes, compared to December. This was backed-up by reports from the live auction that Chinese top makers were once again active, topping the weekly purchasing lists.

The Eastern Market Indicator gained 13 cents a kilogram or 0.8 per cent, to finish the week at 1581c/kg. In US dollar terms, the price headed down 0.3pc to 1051c/kg due to exchange rates moving in favour of overseas buyers.

Wool out of the west saw the most dramatic rises this week, as 18-micron wool rose by 74c/kg to close at 1945c/kg, while 21-micron wool rose by 54c/kg to close at 1805c/kg. Last week's 11pc passed-in rate was an 11pc improvement on the previous week, indicating an improved demand.

Online, AuctionsPlus Wool saw buyers sourcing wool outside of the auction with 813 bales selling for the week. 17 and 18-micron fleece wool sold up to 1440c/kg and 1386c/kg (greasy) or 2021c/kg and 1902c/kg (clean), while 19 and 20-micron fleece wool sold up to 1280c/kg and 1384c/kg (greasy) or 1797c/kg and 1791c/kg (clean).

The top priced lot online last week was a line of 16.2-micron SUPAAFM Merino fleece. The lot had a very low 0.6pc vegetable matter and was 83 millimetres in length. This lot was branded CHALLICUM, offered by Landmark Melbourne and sold for 1665c/kg (greasy).

Developments over the weekend following the auctions seem to have brought a level of fear into the market, with the ASX 200 tumbling 2.2pc on Monday's open.

Larger than expected viral outbreaks in Italy and South Korea may slow trade.

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