Australian Wool: Weak Undertone Until December

There is a strong possibility that Australian wool market prices will continue weak undertones until December when the supply-demand gap is reduced. It is also thought that wool for fine-count yarn will act as the engine in overall market prices and increase prices, while widening the price difference

As of September 2nd, the Eastern Market Indicator (EMI) in Australia working as the index for international wool prices was at 775 Australian cent/kg or 538 US cent/kg. This week, the Australian dollar began to fall, but "this is not going to be a factor for buying," according to major trading firm sources.

Wool is going to enter its high demand season in the middle of October; however, a considerable price increase is unlikely because there is plenty of supply until November. In February, fine-count yarn will be in short supply and it is considered that users will start purchasing in December.

Wool purchases by China are still slow. The sagging demand for Australian wool reflects the slackening of product movement and the shortage of electric power, in addition to the development of the Chinese wool market. Despite the allocation of new import quota at the end of September, it is unlikely that product prices will move up considerably because this is not only an off-season, but also the supply volume is sufficient.