By Augusto Semmelroth | Source: Riemann
After some revived buyer and seller interest in the Riemann Forward Market, bids and offers were tempered and sporadic this week. With most merino fleece wool types easing 20-35¢ in the physical market this week, exporters stepped back to reassess their positions. Producers took a “stand still” approach, leaving offers unchanged.
For those following the market activity on Riemann, this will come as no surprise. Most of the interest in the Forwards tends to come on the back of changes in physical prices rather than participants taking a medium to long-term view on the market. In other words, forward markets usually reflect events in the physical market, not projections about future supply/demand scenarios.
Overall, producers are now sitting tight with offers around 1330-50¢/kg clean for 21 micron contracts with deliveries in summer and early autumn. From April onwards, offers ease to a range of 1290¢ to 1310¢/kg clean depending on the maturity. However, buyers remain cautious in locking in prices for next year at or above 1300¢, resulting in no actual trades executed this week for 21 micron contracts.
Interest in the 18.5, 19 and 19.5 micron has been sporadic from both producers and exporters this week. Most fine wool producers remain keen to take a position on a 21 micron and wait for a recovery in the premiums rather than lock in a fine wool contract with premiums to 21 micron wools capped at relatively low levels.
Table 1. Riemann 2-month trade summary
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