Join Date: Feb 2006
Location: Mid Norfolk
Thanked 78 Times in 69 Posts
The advice I received with my teak (yes, it looks just like yours) bench was to allow it to weather to a lovely grey colour. Teak is, after all, the wood of choice on many boats, so it must be up to it.
However, we didn't like it although the bird droppings were less noticeable on the greyest areas!
So like you I rubbed the wood by hand, having used a scrubbing brush to get the worst of the algae off, thus generating that hairy surface. Apply the oil and we have a lovely brown colour again. I've kept on top of it and it hasn't needed sanding, so I can't answer your question but I would expect a circular sander to be OK.
Gordon (no responsibility accepted for following my advice)
PS I bought fairly expensive weather-proof covers and they keep the worst of the problems at bay, allowing me to oil once per year.