China’s wool buy-up record
CHINA spent a “recording-breaking” 52 per cent more on wool in June compared with the same month last year.
Australian wool’s biggest client spent $256 million during the month, up from $169 million in June last year.
New figures from the Australian Bureau of Statistics show that in 2017-18, China bought $2.9 billion worth of Australian wool, a lift of more than 21 per cent on the previous 12 months.
The data shows China bought 79 per cent of the wool offered for sale in June, up 11 per cent on June last year.
Australian Council of Wool Exporters and Processors executive director Peter Morgan said China drove the Eastern Market Indicator to an average of 2038 cents a kilogram clean in June, up from 1495 cents for the same month in 2017.
“There was a significant rise in prices for the 12-month period and June was the highest month of the year,” he said.
For the financial year, 85 per cent of China’s buying was for wool 23 micron and lower.
But as the “pipeline is pretty much empty”, Dr Morgan said he would be “amazed” if we don’t see more of the same from China this season.
“We can expect to see a continuation of prices but at what level I don’t know; when the EMI was at 1500, no one thought about it being 2000,” he said.
National Council of Wool Selling Brokers of Australia executive director Chris Wilcox said there were no signs of China slowing down.
Mr Wilcox said one of the country’s biggest wool buyers would be opening a new mill later this year. “Zhejiang Redsun Wool Textile, who are probably the second to third biggest wool processor in the world, will be opening a new mill in Tongshan, China, in October,” Mr Wilcox said.
“Obviously they’ll need to buy wool to feed that mill, so it’ll be interesting to see how other mills respond.”
Second to China’s export efforts for June was India, which bought nearly 10 per cent of bales. Mr Wilcox said this was because of a last minute scramble in June, that had India paying 97 per cent more for wool than in June last year.