Market rise slow but healthy

THE Australian Wool market resumed after the three-week recess, and a reasonably large volume of greasy wool allowed the restocking of mills without too much problem. 

While it would have been nice for growers to see a large bounce in prices that was not to be. 

A reasonable volume of business in Asia had been conducted over the break, enough to keep the larger processing mills on the front foot, but the currency stymied any hope of a positive boost in prices. 

The currency market have been very volatile over the past three weeks whilst the wool market rested, and so even though prices rose by a healthy 9 US cents across the range of merino wools, the movement in AUD was minus 11 cents. 

Some of the finer merino wools were not up to buyer’s expectations in terms of quality, so the Sydney catalogue especially was priced accordingly. 

But they will improve and even this week buyers are more upbeat about the quality of the forthcoming offering for superfine merino wools. 

MEDIUM merino wools fared a little better and prices for these wools are now consistent across all three selling centres indicating an underlying strength in the market. Pieces and Bellies for the knitwear sector were quite strong as the sweater market is consistent at present. 

Crossbred wools were mixed, but generally held their ground, and the maligned cardings sector has obviously failed to find any new inspiration over the recess, but we live in hope. 

THE early stage processing fraternity were the strongest players in the auction this week restocking inventory which had been depleted during the recess. 

Some reported reasonable sales during the break, but many did not. 

For those smaller mills in the combing sector life is rather difficult.

Noil, the byproduct of combing is virtually impossible to sell as the market for these remains totally dormant, so the cost equation for combing wool becomes difficult when the value of the byproducts of noil and wool grease are so low. 

Energy costs and financing costs are both still rising, so life as an early stage processor is not much fun at present. 

Carbonising mills have an even more dire situation with very tepid demand for the carbonised product as most knitwear spinners prefer to use wooltop rather than the weaker, shorter fibres from the carbonised sector. 

Only the large combing mills with the financial capacity to provide support to their clients and strong marketing skills are finding enough sales at present to keep their mills in full production. 

The smaller mills are either reducing production, or surviving on the commission combing crumbs dropped by their larger counterparts. 

A VERY hot period in Europe (high 30’s) has kept retail enthusiasm subdued.

Many European mills are still in holiday mode, and lots of cities are deserted except for a few international tourists as the locals all shelter from the heat by the seaside. 

Schools return after next week, and hopefully the weather will moderate and allow retailers and wholesalers to turn their minds to the upcoming woollen garment season. 

Despite the current gloomy scenario mills in Italy are not overly pessimistic but are quietly optimistic of an improvement in coming months, which is refreshing news. 

Interest rate cuts which have begun in Europe and will most likely continue for the remainder of the year should provide consumers with enough financial relief to at least buy a few garments this season, and European consumers do care very much about the latest styles and fashion. 

IN CHINA the domestic garment selling season is still a couple of months off, but mills have been busy producing their basic stock as best they can in anticipation of a normal season. 

A lot of things need to go right for the Chinese industry to achieve a normal textile season of course, but at present they are in general preparing for normality. 

The extremely hot Summer in China (40 degrees) has been a challenge, but so was the previous year, and the one before that so a good sales outcome is not out of the question yet. 

A fabric expo in Shanghai this week, followed by the Spin Expo yarn exhibition the following week will no doubt be watched closely to look for positive signs for the upcoming season.