Not-so-golden fleece: Australian wool prices plunge amid Sino-U.S. trade war

[Eugene]

Source: Reuters

BUSINESS NEWS AUGUST 15, 2019 / 10:51 PM / UPDATED 25 MINUTES AGO

Not-so-golden fleece: Australian wool prices plunge amid Sino-U.S. trade war

Jonathan Barrett
3 MIN READ

SYDNEY (Reuters) - The price of Australian wool favored by Chinese clothing makers has dropped as much as 20% in the last fortnight, sales reports show, with would-be bidders shunning auctions as the Sino-U.S trade war ramped up.

The plunge began immediately after an Aug. 1 announcement from Washington that fresh tariffs on Chinese imports would include clothes and shoes, sapping wool-demand from factories in China that churn out everything from street fashions to sports gear.

Bidding has been particularly weak in Western Australia’s Fremantle auction, where more than half of fleeces are failing to find a buyer, the sales reports show. Prices have also been pressured in the country’s two other big selling centers of Sydney and Melbourne.

Australia controls 90 percent of global fine-wool exports, where prices are driven by Chinese wool mills and Italian garment makers.

“Everything has fallen,” said Andrew Blanch, managing director of Italian textile maker-owned New England Wool, which has an office at the Sydney auction site.

-snip-

Read more: https://www.reuters.com/article/us-australia-wool-china/not-so-golden-fleece-australian-wool-prices-plunge-amid-sino-u-s-trade-war-idUSKCN1V605Y

[Mosby]

1. I thought trade wars make prices go up, not down.

The media really needs to get their stories straight.

[Eugene]

2. If the mills can't sell their products in prime markets,

demand for raw materials takes a hit. This trade ware is disrupting supply chains as well as inflating end-user prices.