Strength and stability

Wool Market Update 18th October 2024

“Remember that the storm is a good opportunity for the pine and cypress to show their strength and stability.” – Ho Chi Minh

The auction market stalled at the start of the week with medium wools and crossbreds becalmed and the finer wools losing ground. By week’s end prices had fallen generally between 1 and 2 per cent. 19 and 21 micron and crossbreds bucked the trend finishing the week unchanged. A weaker Aussie Dollar did little to counteract the lack of substantial new demand from offshore.

The forward market remains marooned. Bidding and offering remains conservative in the nearby months. Buyers, guided by the lack of offshore interest and continued global uncertainty, remain around 2% under cash. Sellers, who were looking for a continuation of the rally this week and placed offers only 1% over the close of last week. Unfortunately, the market failed to deliver. Confidence stays fragile. The much-reported stimulus package in China, the key manufacturer and important consumer, is yet to filter through to the spot auction or forwards. Longer term confidence is still marked by solid bidding in the forwards for late 2025 and into 2026. Premiums vary between 3 and 7% on limited volumes.

The rollercoaster ride that has punctuated the year to date looks likely to continue. 36,500 bales on offer next week is unlikely to pressure the downside but the continued tepid demand and lack of consumer confidence is expected to provide significant headwinds.

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