Wool market finds its base

10th July 2026

As expected, the Australian wool market found a base this week and firmed up slightly.  After a tentative first hour or so, Tuesday’s auction saw 20 or 30 cents added to most merino types and as usual more to the better end of the clip.  Fremantle kicked into gear for their single day sale and added a solid 30 to 40 cents setting the tone for the east to follow on Wednesday which they duly did.  Some greasy and top business was concluded after Tuesday’s sale which added to the confidence on Wednesday and although there were a few red numbers on the market report everyone agreed that it was a solid, stable end to the week.

The AWEX EMI closed 5 cents higher in Aussie Dollar terms, but 13 USC cents higher thanks to a weaker US Dollar.  The market was reported as 8 Euro cents higher which is not a significant number at face value, but the positive tone has restored some confidence among the Italian fraternity and bodes well for the new season, especially after some good signals albeit overlaid with the usual degree of Italian caution from last months yarn and fabric fairs in Italy.  In Chinese currency the Australian wool market rose by almost exactly one yuan per kilogram which will keep stock values rising even though it is becoming a little more difficult to make transactions in the local market.

The Australian wool market is following the almost perfect textbook pattern at present with the 19-micron in USD retracing basically one quarter of its October to June rise. Typically, a rising market will double in price which has not quite occurred yet, but by taking a breather it does allow for a second wave to come along although the processing calendar and geopolitical strife are working against this in the medium term.  In the short term there are only two small auction weeks left until the recess.  With 21 thousand bales next week and 25 thousand the following week the trade will be looking to cover their requirements from a total of 46,000 bales.  In the same two weeks last year they had 61,000 bales to play with, so there is no chance that the market will be anything but firm next week and the week after.

Of course, there is always the chance of a left of field issue to arise and destroy the best laid plans.  Super Typhoon Bavi which is approaching Eastern China and the key shipping ports of Shanghai and Ningbo over the next few days may throw a spinner in the works for those running a very tight supply chain but hopefully it doesn’t cause too much damage or flooding in these low-lying areas. The situation in the Middle East hasn’t improved this week with hostilities looking more likely to resume than not according to recent media headlines.  The Ukraine situation is also still boiling away and playing on the minds of European consumers, but they are also starting to mark off the days on the calendar until summer holidays.  A heatwave while you are at work is not enjoyable compared to one when you are at the seaside, so once everyone has had a chance to refresh and recharge their batteries the outlook from a consumer perspective will improve as it always does at this time of year.

People doing the rounds of fabric fairs and customers in Europe are reporting the usual discussions and comments driven by the end of season malaise, but also suppliers this year are running up against complaints about price.  The increase of the past 8 months is now being realised in the fabric being sampled for deliveries for Spring/Summer 2027 and in some cases, margins are being eroded in order to actually conclude a sale.  Combing mills would be in raptures if they were only forced to give away a portion of their margin to make a sale, rather than usually giving it all away before even getting down to negotiations because this stage of the pipeline has so much over capacity.  The price resistance will have some effect on the overall market, but it is not yet a large enough chorus to cause a fracture.

So, the ‘Ides of JASON’ have arrived which is always a tough period for everyone in the wool industry, but we are actually in a far better position this year than we were in 2025.  Last July the wool market was bumbling along in a 5-year-old trading range trying to break higher and not succeeding.  Supply was becoming an issue but was not yet really a key driver of the market as everyone thought that demand was King.  The discussions between suppliers and brands or retailers were dour as always and the lingering effects of the post-Covid slowdown was still causing inventory issues.

July 2026 sees the pipeline virtually empty.  Fabric mills have had a much better six months than the comparative period and volumes are up. Knitting mills are beside themselves with the orders which have rolled through their production lines so far this year and theycan now coast into the summer period with some planned shutdowns for maintenance before getting busy again later in the year.  The early-stage processing sector has been a case of the haves, and the have-nots with those with a good order book taking the cream whilst the small commission operators picking up then scraps only occasionally.  But most players in the industry are well placed to hunker down for the northern summer and then embrace the new season in November or December.  The JASON period is always challenging for those tasked with selling a weekly or monthly allocation, but brighter spots do occur and with the small volumes of wool available for the next 5 weeks the underlying greasy market will definitely not be falling away to make their task any more difficult.