FOR the third successive January, post-Christmas prices for wool have opened strongly.
"That was not unexpected," said Techwool Trading buyer Josh Lamb. "Although the prices were little racier than we expected."
AWEX's Eastern Market Indicator, which closed strongly prior to Christmas at 1189c/kg clean, rose 8c/kg last Tuesday, a further 22c/kg on Wednesday before easing 3c/kg on Thursday.
The indicator closed the week at 1216c/kg - a rise of 2.3 per cent.
But in US dollars the rise in the EMI was even stronger - up 6.4 per cent from US1177c/kg to US1252c/kg.
The gains were strong across wool types and fleece lines. The strong opening resulted in a relatively low pass-in rate of 7.9 per cent from a total national offering of 49,498 bales - 1500 bales above the initial roster.
Mr Lamb attributed the stronger market to Chinese concerns for raw wool supplies.
Those concerns were reinforced by a slowdown in Australia's wool receivals, with AWTA reporting its testing throughput for November and December as below the corresponding 2010 rates.
Because of the slowdown, receivals for July-December were down 0.9 per cent - or 9000 bales - on the previous year.
But despite last week's positive opening, superfine and ultrafine prices are still struggling to attract the premiums they would normally expect over the middle-micron types.
In Melbourne last week the 18-micron indicator was only 17 per cent above the 21-micron indicator. In greasy prices 18-micron wool was fetching only 170c/kg more than a 21-micron fleece line.
Mr Lamb said the weaker demand for 17 and 18-micron wool was a reflection of the ongoing economic problems in the US and Europe.
"Most of the product made from 17.5-micron invariably ends up in the Europe or the US, whereas a 20 to 22.5-micron wool is ending up in product bought by the Chinese," Mr Lamb said.
