Australian wool market makes small gains

The Australian wool market steadied this week with prices rising 0.7 percent on average values, as the Australian dollar retreated from seven-year highs of 80 US cents, analysts said on Friday.
The AWEX Eastern Market Indicator (EMI) rose five cents to finish the week at 772 cents a kg clean, based on increases of nine cents in the northern market (Newcastle), and one cent in the southern market (Melbourne).
Their regional indicators ended the week at 783 and 763 cents a kg clean, respectively.
In Fremantle, the Western Region Indicator gained eight cents to finish the week at 745 cents a kg clean.
"It has been a good week given the major changes in the US currency and in the size of the offering over the last few weeks," said Peter Morgan of the Australian Wool Industries Secretariat.
"After breaking the 80 US cent barrier last week, the US exchange rate has fluctuated wildly since then, based largely on perceptions of the US economy," Morgan said.
The Australian dollar hovered between the 77 and 78 US cent level for most of the week, with analysts concerned that the weakening of the Australian dollar has led to only a small increase in wool values.
The EMI picked up three cents on Tuesday at Newcastle sales, followed by steady Wednesday sales, rising by a further two cents on Thursday to end the week on a positive note, he said.
"There was strength across most micron ranges, with fine wool, and ultra fine microns in particular, in keen demand," Morgan said.
Notably, the Northern 18.5 Micron Price Guide (MPG) rose 27 cents to 959 cents a kg clean, while the Southern 22 MPG gained six cents to 810 cents a kg clean.
"Fine wool was well supported at the last sales of the superfine season in Newcastle, with most micron categories showing good gains," woolbroker Landmark said in its weekly market report.
However, finer microns struggled in Melbourne, as the specialist fine wool sale in the north attracted most buyers.
Buyers for China, Italy and the topmakers led the market this week, with fine wool buyers for Koarea also active.
The national pass-in rate was relatively low this week, falling by almost five percent, with 13.9 percent of the week's 55,420 bales passed in, Landmark said.
This was due to the small price rise, and the possible realisation of continuing subdued exporter demand, it said.
Next week, another large offering of 64,871 bales is currently rostered for sale in Sydney, Melbourne and Fremantle.
"With sluggish demand and a larger volume of wool on offer, prices are expected to be stable or possibly fall, unless new business can be found during next week's trading," Landmark said.