Wool Report - Local markets resume after winter recess

By Damien Whiteley
Tasmanian Country
25 Aug 2025
Sheep

The world’s greasy wool markets resumed this week with auctions held in all three Australian selling centres, plus South Africa where the price action mirrored that of the Australian market.

Uruguay has been selling small volumes privately during the recess, as has Argentina, particularly offering certified wools for those Chinese mills wanting such.

The New Zealand market had also continued to operate during the winter recess in Australia with only small volumes of around 6,000 bales per week and alternating between North and South Island sales.

In the Australian auction results were generally dearer as expected, although certainly not dramatically so.

Just over 41,000 bales were offered to the trade and with most mills keen to restock after the three week recess bidding was keen, especially in the Sydney catalogue where better yielding wools were available. 

The Melbourne catalogue continues to show the effects of the drought, and these lower yielding wools pose problems for many Chinese buyers. Overall the market indicator rose by 8 cents in local currency terms, decreased by 10 US cents, and eased by 3 Euro cents. 

Chinese based processors purchasing for their domestic market saw prices around half an RMB cheaper for the week, which was welcomed but not really significant enough to do much in the way of demand.

Practically every category of wool saw at least some gains for the week, apart from those lots with really troublesome specifications, but these were purchased nevertheless by the one or two topmakers with a bit of flair and nous to cope with the specs outside of the norm.

Knitwear still dominates the downstream garment making and again some of the fleece lots are destined for this segment, but it also does lessen the discount which would otherwise be the case for low tensile strength fleece lines.

Crossbred wools continue on their merry way even though they are now getting dearer than the equivalent types in the New Zealand market, which admittedly doesn’t have many of these 28-30 micron wools at this time of year.

The finer crossbreds, with good specifications and high quality preparation standards are finding their way back into blends with merino wools as there is simply not enough broad merino lots on offer to make the traditional 22.5 or 23.5 micron blends.

Many on the producing side of the industry are rightly wondering if the low supply will generate the long awaited price rise that we are all waiting for, and if this will stem the exodus from the industry at grower level.

The market is definitely not going down any time soon, and futures on Riemann did trade well above spot for 21 micron this week at 1485 c/kg illustrating the confidence, or desperation of some buyers for the next few weeks.

Given that Sydney does not even provide a quote for 21-micron at the moment it may also just be a case of getting cover for something that they know they will be forced to buy no matter what in the next month or two.

Pastoral wools being shorn in South Australia at present are certainly finer than their normal 21/22 micron, well grown and testing very well, but securing a container of 21 or 22 micron wool in the spring may be a challenge, hence the need to cover the price now.

So, will the market boom in the next month or two – unlikely, and if it does it is not going to be sustained. 

September and October, and even into early November is still the period when mills have produced the basic quantities and are awaiting news from the early retail events.

The industry also needs the weather to cool down, and probably dry out in Northern China, for consumers to show much inclination to purchase a new sweater or two.

Whilst the low production and auction volumes will keep the heat on, it is highly unlikely that the market will actually rise over the next three months, and if it does, like it has about twice over the past twenty years, it will probably also correct back to current levels.

A much more likely scenario would be for the market to trend sideways, gradually climbing perhaps, and build up a head of steam by Christmas.

Getting a few of the global issues sorted would absolutely help the consumer confidence and the New Year could be the harbinger of better times for our beleaguered industry.

The only thing we are sure about is that when it does go up, it will be with a bang, so that will make for some interesting decision making.

Over the past three weeks, whilst some wool buyers kept busy visiting farms, and some reclined by the pool in the tropics, the global economic situation has not improved dramatically despite many meetings and summits.

The European mills are still on their annual holidays with some to return next week and the remainder the week after.

They totally shut down over this traditional summer holiday period to the extent that even online ordering systems are out of service at many fabric mills.

Certainly no payments can be made and no new business is generally considered.

That could all change next week of course, and many are hoping that this is the case.

The Spin Expo yarn exhibition was held this week in Shanghai, obviously sans Italians, and the larger mills entertained many visitors but the smaller mills struggled to entice many passers-by.

In a couple of weeks the Intertextile fabric exhibition will also take place in Shanghai and many of the trade will also make the trip to Nanjing for the annual Nanjing Wool Conference which can stimulate some short term greasy wool business in a good year.

So the outlook still remains relatively positive, and if all the jawboning across Europe can resolve the Ukrainian situation, a solution can be found in the Middle East and the Chinese Government throw a few dollars more into the stimulus pot we could be in for a pretty happy fourth quarter.

A bit more rain across Southeastern Australia would make the picture complete.

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