Fremantle Wool Trading owner and director John Bradbury said there were a number of reasons that wool, in particular lambs wool, was at such a low price.

"The mills that use lambs wool are diminishing in Europe," Mr Bradbury said.

"Free lambs wool which is low in vegetable matter (VM) are carded and spun in Europe from scoured wool without carbonising.

"They are then used in the hosiery market which is predominantly women's knitwear because it needs to be soft against the skin.

"The Chinese only use carbonised lambs wool as do most businesses into Asia, so of course there is less demand as more and more production is moved into this region."

Mr Bradbury said there was a good market for open top lambs wool with a length of 45mm or more.

"Chinese production is more focused on open tops which are produced in the worsted system but left in loose form rather than sliver tops," he said.

"These can be blended into carding yarns where the fibres do not need to be parallel."

Mr Bradbury said WA lambs wool was shorter this year so there were less lambs making the open top length.