Weekly Market Reports


7 May 2021

Friday, May 07, 2021

WEEKLY MARKET REPORT

Week Ending 7th May, 2021

 AWEX Northern Micron Indices Comparison

AWEX INDEX

This Week

S45/20

This Week

M45/20

Last Sale

S44/20

Sydney

Change

Last Year

Sydney

Sydney Yearly

Change

17

2268

2278 2304
-36 1657 +611

18

1913

1920

1948

-35

1488

+425

19

1597

1598

1637

-40

1353

+244

20

1344

1357

1365

-21

1303

+41
21 1277n 1283 1277n 0 1278n -1
 26 - 763 793 (M) -30 (M) 846n (M) -73 (M)

28

499n

501

515n

-16

611n

-112

MC

901n

911n

922n

-21

796n

+105

MARKET TO HOLD ABOVE 1300??

The good fortnight the market had with a combined 51 cent gain came to a sudden stop this week with a 23 cent retreat in the AWEX EMI to 1319. With 48,000 bales on offer and plenty of enquiry, all the showfloor talk was for a very solid to dearer market but by Monday afternoon it was evident that sentiment had changed as forecast rostered volumes for next week’s sale ballooned from 38,600 to 54,700 in a week, an increase of 41% with estimates for the following sale expanding by 22% (32,700 to 40,155). It would seem that early figures released for these 2 sales were grossly underestimated in the first instance giving buyers and exporters a false reading of up and coming volumes. Added to this was the extra volume of wool put into the next few sales as the market rose. Some of this wool was harder to place with higher VM and low yielding types held over from the drought. These wools were cheaper from the get-go and dragged the market lower.

As we stated earlier, the market shed 23 cents to 1319 with a similar fall of 26 cents in US$ terms to 1019. The fall in the FRX to 77.25 (0.65) was not enough to stave off the falling market. All fleece microns suffered falls (bar 21s and broader) ranging from 20 to 40 cents as all types came under pressure. Skirtings fell by similar amounts, 20/40 cents with low VM types (< 2%) with good AM results quoted about 10 to 20 cents back. Cardings recorded similar falls to their combing counterparts of 20 to 30 cents with low VM types less affected. All centres’ MCIs still remain above 900 averaging 912 cents. Crossbreds also lost ground to see most microns (26 to 32) give back 15 to 30 cents. The pass-in rate more than doubled to 15% up by 9% on the previous sale.

Apart from sentiment and quantity variation influencing the market, logistical problems and buyer finances are still at the forefront of exporters’ dramas. Their ability to plan buying strategies and put those plans into action week to week is somewhat of a guessing game as wool deliveries are still 2/4 weeks delayed into China and more to other destinations. The market has performed well and absorbed the larger volume on offer this season, over 104,000 extra bales offered to the trade when compared to the previous season with a market basically rising as demand picks up as the effects of Covid-19 slowly dissipate around the world. The latest testing figures released by AWTA make for some interesting reading. April figures show a 19% increase compared to April, 2020. Total weight tested season to date is up by 1% which equates to 264mkg tested compared to 261mkg last season due mainly to heavier wool cuts per sheep as a result of the better season and higher lambing % from last year. The largest offering since the opening sale of the year (54,700 bales) will test the market next week.

Southern Aurora Fwd Prices

Micron

Date

Low

21

sept. 21

1240

Main Buyers (This Week)

1

Techwool

5146

2

Endeavour wool

3977

3

Tianyu Wool

3952

4

Fox & Lillie

2970

5

Modiano

2139

6

Aust. Merino

2121

Eastern Market Indicators (AUD cents/kg clean)

1319 cents ê  23 cents compared with 30/04/2021

Northern Market Indicators (AUD cents/kg clean)

1393 cents ê 28 cents compared with 30/04/2021

   AUD/USD Currency Exchange

0.7727 ê 0.0062 compared with 30/04/2021

30 April 2021

Friday, April 30, 2021

 WEEKLY MARKET REPORT

Week Ending 30th April, 2021

 AWEX Northern Micron Indices Comparison

AWEX INDEX

This Week

S44/20

This Week

M44/20

Last Sale

S43/20

Sydney

Change

Last Year

Sydney

Sydney Yearly

Change

17

2304

2305 2274n
+30 1697 +607

18

1948

1951

1916

+32

1518

+430

19

1637

1648

1595

+42

1414

+223

20

1365

1367

1333

+32

1362n

+3
21 1277n 1300 1262n +15 1370 (M) -70 (M)
 26 - 793n 794n (M) -1 (M) 861 (M) -68 (M)

28

515n

520

515n

0

661n

-146

MC

922n

917n

798n

+25

840n

+82

LARGE QUANTITIES, RISING A$, NO WORRIES!!

With the anticipated big offering this week of over 50,000 bales some in the trade were fearful that the extra volume catalogued would be too much for buyers and exporters to handle. After last series’ good gains, especially for sub 19s, the rush to capture the rising market added 6,000 extra bales to the roster. The market started on a solid but tentative note in Sydney in the opening session with Melbourne adding double digit gains to almost all MPGs. Momentum built on the second day as gains ranged from 10 to 50 cents depending on centre and micron. By week’s end rises of 30 to 40 cents covered all merino fleece microns bar 21s which gained 15 cents. Skirtings followed their fleece counterparts to record 20/30 cent lifts on most types with < 18.5 micron and < 2.5% VM 35 to 50 cents to the good. Cardings also kept up last sale’s momentum as the MCI rose by 25 cents to 922. All types in this sector recorded gains of 10 to 40 cents. Crossbreds had an up and down sale to finish the series about 10 cents cheaper. The AWEX EMI jumped by 30 cents to 1342 (2.3%), its largest weekly gain since mid February. In US$ terms the rise was just as impressive, 34 cents to 1045 (3.35%) as the FRX strengthened by 1 cent to 78 cents. Growers were happy with the rising market as the pass-in rate was the lowest since the end of January at 6.4%

The market came under more pressure this sale as buyers scrambled to secure wool. Medium types were on par with the finer wools as far as gains were concerned all lifting by an average of 35 cents. Buyers looked for value in the rising market and the lower types benefitted as they became buyers’ “target wools” to try and cheapen up their orders. This strategy did not go to plan as some of these types cost just as much as some “straight types” by the end of the sale. The smatterings of business that have prevailed in the market outside of China for some time now became even more prevalent this series as the extra enquiry and written business from many major players in India and Europe (catching the Chinese unaware) pushed the market to new levels even with the largest offering since mid March and the ascending FRX. When these 2 factors combine it is a distinct disadvantage to Aussie woolgrowers unless demand outstrips all other factors as we saw this week. It is great to see some competition to the Chinese juggernaut that buys 80% of our wool and has been a very resilient customer and almost solely responsible for the recovery in the wool market since the low point of 858 cents in early September - a massive 64% gain to date.

Is this the start of the recovery everyone has been waiting for?? Signs are promising that the post Covid-19 global economy is growing but a full recovery is some time off. Signs for a solid market next week are good as Melbourne and Fremantle finished on a dearer note on Thursday. 48,000 bales are on offer.

Southern Aurora Fwd Prices

Micron

Date

Low

21

July 21

1290

Main Buyers (This Week)

1

Techwool

7664

2

Fox & Lillie

4045

3

Endeavour Wool

3970

4

Tianyu Wool

3553

5

Aust. Merino

3090

6

PJ Morris

2261

Eastern Market Indicators (AUD cents/kg clean)

1342 cents é  30 cents compared with 23/04/2021

Northern Market Indicators (AUD cents/kg clean)

1421 cents é 23 cents compared with 23/04/2021

   AUD/USD Currency Exchange

0.7789 é 0.0081 compared with 23/04/2021

23 April 2021

Friday, April 23, 2021

 WEEKLY MARKET REPORT

Week Ending 23rd April, 2021

 AWEX Northern Micron Indices Comparison

AWEX INDEX

This Week

S43/20

This Week

M43/20

Last Sale

S42/20

Sydney

Change

Last Year

Sydney

Sydney Yearly

Change

17

2274n

2263n 2148
+126 1749n +525

18

1916

1916

1833

+83

1593

+323

19

1595

1576

1546

+49

1483

+108

20

1333

1315

1308

+25

1443

-110
21 1262n 1239 1250n +12 1438n -176
 26 800n 794n 800n (M) -6 (M) 865 (M) -65 (M)

28

515n

528

510n

+5

674n

-159

MC

897n

910n

877n

+20

865n

+32

FINER WOOLS LEAD THE WAY

The solid finish to wool sales in Melbourne and Fremantle late in last week’s series gave hope that the market could reverse last week’s cheaper trend. All the talk on the showfloor was for a dearer market with emphasis on the sub 19 micron types with broader spec wools just holding their own or in buyers’ favour depending on how good or bad test results were. The market exploded into action from the opening lot with all Merino microns adding to their value regardless of micron, VM or mid-breaks with 17s in Sydney jumping 108 cents on the opening day. The market did steady in the final session as finer microns added to their values with broader types unable to hold the previous days increases to lose 10/15 cents. By week’s end 18.5 and finer added 70 to 130 cents with 19s and broader lifting by 10 to 50 cents. Skirtings also commenced the sale in a hurry with rises of 30/40 cents across the board with < 17.5 micron with < 2% VM 80 to 100 cents dearer. The final session saw the urgency come out of the sale room as 18 micron and coarser types give back 15 to 20 cents from the previous day. Cardings added money to their solid sale last week to average a 20 cent gain across the 3 centres with their MCIs now averaging 910 cents as all types in this sector were 20 to 50 cents higher. The crossbred sector had the quietest sale as quotes were in sellers’ favour for most types in this sector. The AWEX EMI added 21 cents to 1312 (16 cents in US$ terms) to 1011 as the FRX barely moved from 77 cents. Even with the rising market the pass-in rate was still on the high side at 10.7%.

Fine types continued their trend of recent months getting dearer while broader microns look to be in some sort of holding pattern with very little price change. As we have stated recently, with the good season pushing wool coarser by 1 to 1.5 micron, the volume of sub 19s is decreasing and broader micron wools are on the increase, thus the less volume in the finer sector of the market is pushing prices higher and the bigger volume and heavier VM levels of coarser types are causing buyers to struggle to place these wools despite steady enquiry and the stable FRX. China led the enquiry for new business with spatterings of new business written outside China with these few new containers immediately assisting the market. Of course the market is dependent on consumer demand with the easing of restrictions as vaccines get rolled out, encouraging more people to spend money which will be the key driver to lifting demand. Global economies will grow in 2021 but not as quickly as the IMF predicted as some countries vaccine rollouts are slower than anticipated and some countries experiencing more waves of Covid-19 such as India and Brazil. China, on the other hand, looks to be in recovery mode far more than other northern hemisphere countries. Their economic growth was 18% higher in the 1st quarter of 2021 than in 2020 when their economy shrank by 6%. Industrial output for March was up by 14% and retail sales grew by a massive 43% from March 2020.  With the rising market national volumes have grown to 50,800 bales with some sectors expecting a slight downward price adjustment.

Southern Aurora Fwd Prices

Micron

Date

Low

21

July 21

1250

Main Buyers (This Week)

1

Techwool

5422

2

Fox & Lillie

3668

3

Endeavour Wool

3501

4

Lempriere

2601

5

Tianyu Wool

2317

6

Aust. Merino

1982

Eastern Market Indicators (AUD cents/kg clean)

1312 cents ê 21 cents compared with 16/04/2021

Northern Market Indicators (AUD cents/kg clean)

1398 cents ê 43 cents compared with 16/04/2021

   AUD/USD Currency Exchange

0.7708 é 0.0400 compared with 16/04/2021

16 April 2021

Friday, April 16, 2021

 WEEKLY MARKET REPORT

Week Ending 16th April, 2021

 AWEX Northern Micron Indices Comparison

AWEX INDEX

This Week

S42/20

This Week

M42/20

Last Sale

S40/20

Sydney

Change

Last Year

Sydney

Sydney Yearly

Change

17

2148

2172 2118
+30 1748 +400

18

1833

1871

1828

+5

1593

+240

19

1546

1557

1582

-36

1513

+35

20

1308

1336

1365

-57

1493

-185
21 1250n 1245 1285n -35 1488n -238
 26 - 800n 796 (M) -4 (M) 899n (M) -99 (M)

28

510n

526

530n

-20

703n

-193

MC

877n

895n

877n

0

886n

-9


SALES RESUME ON A SOFTER NOTE

The resumption to sales after the 1 week Easter recess didn’t go to plan as far as some growers were concerned. An estimated catalogue of 52,000 bales was forecast when rosters were released last week but the totals were reduced to just under 50,000 by Monday as both buyer and seller were preparing for the market to fall marginally. This was the scenario that played out during the course of the sale as the AWEX EMI gave up 9 cents to 1291. In US$ terms the market tracked the opposite way to add 7 cents to 996, this due to the ascending FRX to 77.15 (up by 1.5%). The market fell early in the week as most participants expected but a last day recovery in Melbourne gave hope that the market has bottomed out for the moment. Finer types seemed to be in high demand as 18s and finer lifted by 5 to 40 cents to continue the trend since early in the year with finer microns becoming more valuable as the volume of these decreases with the good season pushing microns out by 1 to 1.5 broader than last season. AWTA figures back this theory up. This season has seen 15% less wool tested finer than 18.5 micron than the previous season. The trend was cheaper for 18.5 and coarser with falls of 25 to 60 cents as wools in this micron range increased in quantity with the good season, especially 19.5 and broader with higher VM lots penalised more and more. Skirtings had an up and down sale to finish the series about square with selected < 17.5 micron types with < 2.5% VM up by about 20 cents. The ever increasing VM levels could be a hindrance to advancing prices as skirtings are becoming more cotted and heavier in colour making them harder to place in orders. Cardings also had a quiet sale to have most types unchanged for the week bar high VM LKS being quoted 10 cheaper. Crossbreds couldn’t maintain their pre-Easter levels with falls ranging from 5 to 20 cents. The national pass-in rate was higher at 14% as some growers resisted the falling market. 

The well earned recess was a good chance for everyone to catch their breath. It gave buyers and exporters a chance to refuel their exhausted bank accounts. The big wool exports expenditure for February/March shipments was the main reason for stress on exporters’ finances but things are on the improve with funds now coming back to Australia with the arrival of wool in China and the week’s recess relieving some of the logistics problems for the short term. Interesting to note that Chinese imports of wool were up 64% this past February compared to a year ago.

The anticipated large offering and the stronger FRX were the main reasons for this week’s fall. The final volume of wool offered was 12% down from the original forecast and, with passed-in and withdrawn wool adding up to over 16%, just 39,700 bales were actually to the trade. As finer wools get dearer and broader types cheapen, the gap between them grows. The difference was 756 cents from 17 to 21 micron in Melbourne a month ago, now it’s out to 927 cents (2172 to 1245). With the market’s recovery in Melbourne on Thursday, things look good for next week. We sold some passed-in lots from this week’s sale this morning for increases of 30/40 cents from their passed-in prices. We open proceedings on Tuesday with 760 bales on offer and a national catalogue of 45,500 bales.

Southern Aurora Fwd Prices

Micron

Date

Low

21

June 21

1260

Main Buyers (This Week)

1

Techwool

6249

2

Endeavour Wool

3790

3

Fox & Lillie

3119

4

Aust. Merino

3090

5

Tianyu Wool

2472

6

Modiano (Aust)

2418

Eastern Market Indicators (AUD cents/kg clean)

1291 cents ê 9 cents compared with 02/04/2021

Northern Market Indicators (AUD cents/kg clean)

1355 cents ê 14 cents compared with 02/04/2021

   AUD/USD Currency Exchange

0.7712 é 0.0104 compared with 02/04/2021

1st April, 2021

Thursday, April 01, 2021

 WEEKLY MARKET REPORT

Week Ending 1st April, 2021

 AWEX Northern Micron Indices Comparison

AWEX INDEX

This Week

S40/20

This Week

M40/20

Last Sale

S39/20

Sydney

Change

Last Year

Sydney

Sydney Yearly

Change

17

2118

2116 2102
+16 1743 +375

18

1828

1831

1799

+29

1578

+250

19

1582

1585

1571

+11

1508

+74

20

1365

1366

1365

0

1463

-98
21 1285n 1270 1280n +5 1458n -173
 26 - 804n 788n (M) +16 (M) 951 (M) -147 (M)

28

530n

526

510n

+20

703n

-173

MC

877n

894n

876n

+1

899n

-22

1,300 A NICE NUMBER TO FINISH ON!!

The market’s subtle rises this week and last have seen the AWEX EMI finish this run of sales at 1300 cents - an increase of 143 cents (11%) since sales resumed in January. The best performing microns have been the fine and superfine types (< 18.5) which have averaged a 246 cent gain in that time. Broader than 19 micron have lifted 116 to 192 cents, with the gap between 19 and 21 micron widening from 210 cents at the start of the year to 297 cents now. The way the days fell in March, we were able hold 5 sales with a total offering of 224,200 bales - the largest March offering in 10 years. As we stated, the market rose by 15 cents to 1,300 with fine wools < 19 micron the main beneficiary gaining 10 to 30 cents. Broader types ended the sale either side of firm by 5 cents. Skirtings had good rises over both days with < 2.5% VM lots 25 to 35 cents to the good and all others 15 to 20 cents better. Cardings had a pretty stable week with no real change in any centre ending with an average movement of -4 cents. Crossbreds also made minimal gains of 5 to 15 cents with the national pass in rate identical to the previous series at 9.5%. The FRX was also a mirror image of its level from last sale at 76.05 cents.

A highlight of our catalogue this sale was the offering of 380 bales of NM wool from two growers under the “Responsible Wool Standard” (RWS) - a voluntary quality scheme founded in 2002 by the Textile Exchange. RWS engages with participants all along the pipeline from growers to retailers in fibre and materials industries.  It’s no secret that for some time now processors and an ever increasing number of retail brands have expressed their desire to purchase more and more NM wool as demand increases. As we have mentioned in previous market reports, oftentimes premiums have been few and far between and in stark contrast to some media reports of NM wool premiums running at 5 to 10%, this was again the case. NM types that were not in the RWS scheme were mainly the same level as prices achieved by “mulesed wool”. Some NM lots even making less money than same mulesed wool types, except a few burry WNR fleece types selling 6 and 8% higher than equivalent mulesed wool. The lots in the RWS scheme were a completely different story, with most lots averaging an 8 to 12% premium (80 to 150 cents) above the market - this equates to $140 to $270/bale better for fleece wools.

Competition was widespread amongst all traders and exporters from China, India, and a smattering of enquiry from Europe, as buyers put to one side concerns of logistical and finance problems keen to secure quantity before next week’s Easter recess. Problems with shipping and finance are still dominating show floor talk, but reduced volume did ease pressure slightly when trying to finance purchases. The original rostered catalogue of 48,800 didn’t eventuate with 44,200 bales being offered, a 10% reduction which has been the case for some time. The cutoff point for which sales are deemed too large looks to be around the mid to high 40,000 mark - any higher the market struggles and below this figure the market seems to cope quite well. A quick look at the yearly comparisons actually has this week’s market 13 cents higher than the same sale 12 months ago. March 2020 was a bad month for the wool market, collapsing by 294 cents (1581 to 1287) when the rot set in from Covid-19 ramifications - and we’re still in recovery mode. Next week is a recess, we’ll offer 1,400 bales on Wednesday, 14th April. Happy Easter to all!!

                                                    Southern Aurora Fwd Prices

Micron

Date

Low

21

April-June 21

1270

Main Buyers (This Week)

1

Techwool Trading

6249

2

Endeavour Wool

3790

3

Fox & Lillie

3119

4

Australian Merino

3090

5

Tianyu Wool

2472

6

Modiano (Aust)

2418

Eastern Market Indicators (AUD cents/kg clean)

1300 cents é 15 cents compared with 26/03/2021

Northern Market Indicators (AUD cents/kg clean)

1369 cents é 13 cents compared with 26/03/2021

   AUD/USD Currency Exchange

0.7608 é 0.0002 compared with 26/03/2021


26th March, 2021

Friday, March 26, 2021

WEEKLY MARKET REPORT

Week Ending 26th March, 2021

 AWEX Northern Micron Indices Comparison

AWEX INDEX

This Week

S39/20

This Week

M39/20

Last Sale

S38/20

Sydney

Change

Last Year

Sydney

Sydney Yearly

Change

17

2102

2068 2063
+39 1883n +219

18

1799

1785

1769

+30

1754

+45

19

1571

1573

1566

+5

1665

-94

20

1365

1364

1350

+15

1632

-267
21 1280n 1273 1262n +18 1609n -329
 26 - 788n 785n (M) +3 (M) 1081n (M) -293 (M)

28

510n

519

510n

0

871n

-361

MC

876n

898n

864n

+12

987n

-111

LOGISTICS DELAYS HINDER MARKET’S RISES!

Many things are conspiring to dampen the wool market’s ability to go to “the next level”. A common theme was that when the vaccines were rolled out en masse the lockdowns and restrictions were being eased and consumers would go back to their old spending habits raising the demand for wool significantly. This may well be the case but recovery seems to be getting pushed back further and further - well into the 2nd half of this year and even into 2022 - as some European countries now experience a 3rd wave of Covid-19 and a much slower than hoped vaccination rollout. Great Britain and the US look to be well on track with their vaccines but Europe is very slow and, in fact, some countries have reintroduced lockdowns and restrictions that will slow the rate of economic recovery in the Northern Hemisphere.

The market only added 8 cents to its overall value taking it to 1285 for the EMI despite the FRX falling by almost 3% to 76 cents from over 78 a week ago. With the falling A$ the market, in US$ terms, followed suit losing 23 cents to 977, a good result for all as growers benefitted from a small rise in the market and exporters were on the receiving end of a cheaper buy in price for their orders. Finer fleece types saw the best competition as < 18 added 30 to 40 cents with broader lots 5 to 20 cents better. Growers warmed to this renewed buying activity as just 67 bales (1.7%) were passed in. Skirtings added 15 to 25 cents for 18.5 micron and broader with lots finer than this fully firm. Cardings also upped the ante with all types in this sector lifting by 5 to 30 cents depending on style, VM and micron. All centres’ MCIs are now aligned in price (876 to 898). Crossbreds had the least movement of all the sectors with most microns in sellers’ favour by up to 10 cents.

With the favourable FRX and the vastly reduced national catalogue, from 46,500 bales late last week to 38,500 bales offered (a 17% reduction) and the smallest offering since December - normally the market could’ve risen by 20 to 30 cents. No doubt the FRX and the smaller volume did help the market with all other currencies used in wool trading prices actually falling by 2 to 3%. Despite the wool market’s level with consumer demand still nowhere near where it was pre pandemic, the single issue restricting the market’s ability to rise is the seemingly worsening logistical issues from dumps to final destination. The delays in shipping are verging on chronic with exporters receiving multiple cancellations of ships leading to weeks and now in some cases months of delays tying up 10s of millions of $ in finance. Some reports indicate the notice time for cancellations are extremely short with wool dumped and ready for loading onto the vessels at the port being jettisoned off delivery and a new schedule “subject to change“ being issued. Some exporter’s containers have been cancelled 3 times from loading onto ships. India and European destinations are faring worse than China as ships bound for these ports are low in number and container space very limited and booked out well in advance of what was the norm a year ago. Next week has a national catalogue of 48,800 bales on offer. Hopefully a bit more business has been written to lift the market.


        Southern Aurora Fwd Prices            

Micron

Date

Low

21

April-June 21

1270

Main Buyers (This Week)

1

Techwool

4682

2

Tianyu Wool

3571

3

Endeavour Wool

3327

4

Fox & Lillie

3024

5

United Wool

2363

6

PJ Morris

1190

Eastern Market Indicators (AUD cents/kg clean)

1285 cents é 8 cents compared with 19/03/2021

Northern Market Indicators (AUD cents/kg clean)

1356 cents é 14 cents compared with 19/03/2021

   AUD/USD Currency Exchange

0.7606 ê 0.0227 compared with 19/03/2021


19 March 2021

Friday, March 19, 2021

 WEEKLY MARKET REPORT

Week Ending 19th March, 2021

 AWEX Northern Micron Indices Comparison

AWEX INDEX

This Week

S38/20

This Week

M38/20

Last Sale

S37/20

Sydney

Change

Last Year

Sydney

Sydney Yearly

Change

17

2063

2039n 2117
-54 1848n +215

18

1769

1770

1809

-40

1715

+54

19

1566

1564

1603

-37

1644

-78

20

1350

1366

1405

-55

1628

-278
21 1262n 1283 1307n -45 1632n -370
 26 - 785n 795n (M) -10 (M) 1095n (M) -310 (M)

28

510n

511

520n

-10

871n

-361

MC

864n

903n

880n

-16

1004n

-140

FINANCIAL CONSTRAINTS HINDER MARKET!

The reduction that the market had this sale was what many buyers had thought was coming for a few weeks. The fact that the market had traded in such a narrow band (1318 to 1309) for the past month had surprised many given the large national volumes on offer, the upward shift in the FRX (the wrong way for woolgrowers) and exporter troubles with finance and shipping delays. The AWEX EMI gave back 32 cents to 1277 (2.5%). The fall was less dramatic in US$ terms as the FRX rose to 78.35 cents, up by 0.85 of a cent, the EMI losing 14 cents to sit at 1000 in US$ terms. All sectors of the market fell. Fleece wools lost 35 to 60 cents across the board with only the very best style type with the exact specifications giving back 20 cents. Skirtings followed the fleece pattern of price direction with the better style low VM (< 2.5%) falling by 30/50 cents with all others losing 40 to 60 cents.  Cardings were overall cheaper in Sydney and Fremantle with both MCIs now in the mid 800s with Melbourne gaining 14 cents to lift above 900 cents to 903. Broader LKS were the main offender in Sydney to have its MCI fall by 16 cents to 864 as they lost 30/40 cents with most other types fully firm for the sale. Crossbreds opened the series cheaper but firmed in the closing session to finish the week in buyers’ favour.  The national pass-in rate climbed to 17% as more growers resisted the weaker prices.

This week’s fall marks the biggest downward correction for the year to date. Since the market rose in January the trading band of the EMI has been very tight (1275 to 1318) and we remain in the price bracket despite this sale’s fall. This sale saw the 1 millionth bale sold to the trade this season with 11.5% (106,000 bales) sold to the trade more than last season at the same time with total offerings up by 63,350 bales (5.6%). The overall value of the clip sold this season to date works out to be $1415/bale. The market is 160 cents (11%) lower than the same week last year. The gap was 400 cents before sales started back in January - the gap narrowing due to the big price collapse this time last year as demand fell off the cliff when the market lost 308 cents (1609 to 1301) in the January to Easter period. On the flipside in US$ terms the market has risen by 200 cents from 800 to 1,000 - a 25% increase. This is due to the FRX climbing by 40% from 55.75 to 77.35 and a clear illustration of just how much demand fell away last year when the FRX was very low.

As we alluded to earlier, financial constraints due to shipping delays and the constant run of weekly volumes in the high 40,000s finally took its toll on the market. The cautious ‘money management’ by buyers that led to a stable market finally relented with risk averse purchasing taking over to match the softer demand signals. The problems with delays in shipping wool that is tying up critical finance now flows all the way back to the wool dumps. The dumps are now so clogged up with wool waiting for delayed vessels they are unable to take delivery of wool early. This has led to dumps calling for wool to arrive the day prior to the ship’s cut-off. This means dumping, containerisation and reaching the port has to happen the same day instead of the usual 2/3 day lag time. This means shipping from our end has compressed in time with deadlines for wool down to 1 day rather than the 2/3 day time allowance that was the norm. Shipping companies estimate a 50% fall in the number of container ships in operation compared to 12 months ago. A ship with wool would arrive in China every 2-4 days, now its 1 every 7 to 10 days. Some buying companies have had to go to their banks “hat-in-hand” to get extra funds to buy wool while finance is tied up with wool on water. Market talk is firm for next week.

        Southern Aurora Fwd Prices            

Micron

Date

Low

21

Apr/May 21

1250

Main Buyers (This Week)

1

Techwool

6383

2

Endeavour Wool

4019

3

Fox & Lillie

3836

4

Tianyu Wool

3798

5

United Wool

2974

6

Aust. Merino

2382

Eastern Market Indicators (AUD cents/kg clean)

1277 cents ê 32 cents compared with 12/03/2021

Northern Market Indicators (AUD cents/kg clean)

1342 cents ê 33 cents compared with 12/03/2021

   AUD/USD Currency Exchange

0.7833 é 0.0086 compared with 12/03/2021


12 March 2021

Friday, March 12, 2021

WEEKLY MARKET REPORT

Week Ending 12th March, 2021

 AWEX Northern Micron Indices Comparison

AWEX INDEX

This Week

S37/20

This Week

M37/20

Last Sale

S36/20

Sydney

Change

Last Year

Sydney

Sydney Yearly

Change

17

2117

2121n 2126
-9 1987 +130

18

1809

1825

1825

-16

1850

-41

19

1603

1601

1597

+6

1768

-165

20

1405

1400

1396

+9

1748

-343
21 1307n 1304 1297n +10 1743n -436
 26 765n 795n 804n (M) -9 (M) 1123n -348

28

520n

530

525n

-5

875n

-355

MC

880n

889n

869n

+11

1054n

-174

MARKET REMAINS STABLE!

Once again we saw a market that struggled to move as stability is the name of the game. The AWEX EMI gave back just 1 cent to 1309. The FRX lost a third of one cent to sit around mid-77 cents as the market added 6 cents to its value in US$ terms to 1016. Looking at the 3 centres we had almost 3 different results. Sydney’s fleece types fell by 5 to 15 cents for < 18s as 19s and broader had modest gains of 5 to 10 cents. Melbourne’s market was overall cheaper with all microns 5 to 10 cheaper bar 17s and 18.5 that rose by 5 to 15 cents. Fremantle fared the best of the 3 centres with 19.5 micron and finer 15 to 30 cents up with 20s and broader gaining up to 10 cents. Fremantle’s indicators are on par or up to 26 cents higher than their east coast counterparts - normally a good sign that the market here can play catch up to the higher levels.  Despite the up and down movements of the fleece market, just 4.6% was passed-in. Skirtings followed the fleece price direction as the opening day’s gains of 10/20 cents were given back in the final session to have this sector unchanged. Cardings continued their positive run as the 3 centres averaged a 19 cent gain to their MCIs as STN and CRT added 20 to 50 cents while LKS were fully firm. The fickle XB market gave up ground this sale as fine and broad microns (26 and 30) fell by 10 cents with the middle microns cheapened up by 30 to 40 cents.

The past few sales have seen the gap between superfine and medium types edge closer as the season for offering < 18 micron draws to a close leading up to Easter. Another widening gap is between medium type merinos and XBs as a global oversupply of 28 micron and broader hampers this sector of the market to have little chance of improving in the short term as demand is sluggish with full recovery from Covid-19 a long way off. On the international scene global demand for New Zealand wool is very strong albeit from a very low base with the market in South Africa continuing to edge further ahead of the Australian market with 19 to 21 micron well ahead of our prices as buyers push hard to secure wool from there as their selling season draws to a close. The selling season in South America is all but finished with virtually all their greasy wool at local mills to keep machinery running through the winter. Demand signals range from terrible in some sectors to enquiry emerging in other areas as supply will run short with the selling season closing in the 2 other main suppliers. Early stage processors are continuing to buy wool and build up a stock-pile ready when for when downstream processors call for “tops” kicks back into gear. Many in the wool pipeline are amazed the greasy market has lifted so dramatically from its low point of 858 cents in early September to +1300 today, a massive 66% gain given that demand from some of their customers is lack-lustre or non-existent with some delaying further purchases expecting a major shift in price.

In a global showcase of Australian Merino wool the America’s Cup team Luna Rossa Prada Pirelli has benefited from the performance attributes of the fibre in its sailing uniform thanks to a partnership with AWI’s subsidiary, The Woolmark Company. The partnership of The Woolmark company with this legendary Italian team highlights the strong link between the world of sport and Australian Merino wool as a premium performance fibre. The partnership has achieved immense media coverage and is influencing global consumers to consider and ultimately purchase Australian Merino wool for activewear. The Woolmark logo can be seen on the team Italy boat when the spinnaker is unfurled.

        Southern Aurora Fwd Prices            

Micron

Date

Low

21

Apr/May 21

1270

Main Buyers (This Week)

1

Techwool

6292

2

Endeavour Wool

3545

3

Fox & Lillie

3486

4

Lempriere

2780

5

Tianyu Wool

2738

6

Kathaytex Aust.

2498

Eastern Market Indicators (AUD cents/kg clean)

1309 cents ê 1 cents compared with 05/03/2021

Northern Market Indicators (AUD cents/kg clean)

1375 cents ê 3 cents compared with 05/03/2021

   AUD/USD Currency Exchange

0.7747 ê 0.0037 compared with 05/03/2021


5 March 2021

Friday, March 05, 2021

 WEEKLY MARKET REPORT

Week Ending 5th March, 2021

 AWEX Northern Micron Indices Comparison

AWEX INDEX

This Week

S36/20

This Week

M36/20

Last Sale

S35/20

Sydney

Change

Last Year

Sydney

Sydney Yearly

Change

17

2126

2103 2125
+1 2072 +54

18

1825

1833

1840

-15

1932

-107

19

1597

1611

1611

-14

1826

-229

20

1396

1405

1397

-1

1803

-407
21 1297n 1309 1295n +2 1783n -486
 26 - 804n 781n (M) +23 (M) 1153(M) -349 (M)

28

525n

568

523n

+2

884n

-359

MC

869n

868n

859n

+10

1090n

-221

FALLING AUSSIE DOLLAR SAVES THE MARKET!

Stability looks to have set in for the wool market as this week’s sale produced just a 4 cent gain to 1310 cents. This follows on from the previous 2 series where the market has fluctuated by only 12 cents (1318 to 1306). All the pre-sale talk was for a cheaper market with the FRX reaching a 3 year high to climb above 80 cents (twice) which could’ve had the market on the back foot to the tune of 30/40 cents. Fortunately the A$ retreated to low 77 cents on Friday, this allowing buyers to stay in the game and do sporadic volumes of business to have a market that was just in sellers’ favour. With the falling FRX the market, in US$ terms, shed 20 cents to 1020. Sydney’s market wasn’t as positive as Melbourne’s with most microns either side of fully firm apart from 18 to 19 micron which shed 10 to 15 cents. Skirtings faded in the final session to finish the sale 10 cents cheaper. Cardings halted their run of 4 cheaper weeks with the MCI adding 10 cents to 869 as most types in this sector posting gains of 10 to 20 cents with < 17 micron lots up to 40 cents to the good. Crossbreds also had a solid sale with broader types > 27 micron fully firm and finer lots 10 to 20 cents higher. Australia’s biggest buyer and trading company (Techwool) dominated buying lists for most types with solid competition from topmakers and processors alike. Growers certainly warmed to the stable market as the passed-in fell by 9% to 9.3% with XBs still the biggest contributor to passed-in wools.

The fall in the FRX produced a scenario that sustained the current price levels despite a not-so-ideal retail economy. The softer FRX gave overseas mills and processors a cheap buy in price if operating in US$ or Chinese Yuan (CNY). The price advantage added up to 2%. As we have mentioned recently the logistic delay in shipping wool to its final destination is restraining buyers financially with additional business unable to be written. Knocking back new business due to financial constraints is nothing new but is just part of the business with the delays in shipping and therefore payments representing 2 weeks of exporters normal auction buying budgets, thus hampering further gains the market might have had with quicker finance available.

Much has been written in various media outlets recently regarding premiums for non-mulesed wool and the demand for it. Nearly all demand is coming from Europe and, with that sector of the market still a long way from being fully operational, premiums were and still are sporadic at best. Some media outlets reported “good premiums” of 20/30 cents being paid recently. A 1 to 2% premium can hardly be called that in most cases.  Most growers with non-mulesed wool are being urged to join a quality scheme called RWS (Responsible Wool Standard). More and more orders that request NM wool are specifying RWS certification as well. One grower who we sold wool for this sale looked to benefit from being in this scheme as the premiums ranged from 80 to 200 cents clean for the fleece wool that averages 4 to 5% VM. This amount of burr would attract a discount of 100 to 160 cents clean normally.   

Next week’s offering has just shy of 50,000 bales on offer to the trade - pretty much a normal volume when looking at the totals since January. Barring any disaster with the FRX ascending, the market should hold around these levels with still no word on when the trigger will be pulled on the Chinese government uniform orders. For those growers who wish to follow the Cumnock Ewe Competition next Tuesday there are a few seats left on the bus that will be going around the farms that have entered sheep. Contact Scott Darmody on 0402 772 342 or scott@macwool.com.au for any information regarding this good day out.

        Southern Aurora Fwd Prices            

Micron

Date

Low

21

Apr/May 21

1270

Main Buyers (This Week)

1

Techwool

7483

2

Fox & Lillie

4096

3

Tianyu Wool

3170

4

United Wool

3077

5

Endeavour Wool

2369

6

PJ Morris

2252

Eastern Market Indicators (AUD cents/kg clean)

1310 cents é 4 cents compared with 26/02/2021

Northern Market Indicators (AUD cents/kg clean)

1378 cents ê 2 cents compared with 26/02/2021

   AUD/USD Currency Exchange

0.7784 ê 0.0179 compared with 26/02/2021

19 February 2021

Friday, February 19, 2021

 WEEKLY MARKET REPORT

Week Ending 19th February, 2021

 AWEX Northern Micron Indices Comparison

AWEX INDEX

This Week

S34/20

This Week

M34/20

Last Sale

S33/20

Sydney

Change

Last Year

Sydney

Sydney Yearly

Change

17

2145

2144 2125
+20 2082 +63

18

1851

1878

1786

+65

1945

-91

19

1625

1639

1536

+89

1839

-214

20

1402

1419

1340

+62

1813

-411
21 1294n 1318 1223n +71 1798n -504
 26 765n 775 734 (M) +41 (M) 1151n -386

28

515n

536

510n

+5

894n

-379

MC

866n

872n

889n

-23

1105n

-239

MARKET CRACKS 1300! YIPPEE!!

The Chinese New Year celebrations didn’t stop the wool market from advancing this week to break through the 1300 cent mark for the 1st time in almost 12 months. Often around Chinese New Year can be a difficult time to sell wool due to mills being shut down and a sometimes general lack of interest but not the case this year. The AWEX EMI shrugged off the lacklustre 2 sales that saw the market fall 16 cents to record a 43 cent gain to 1318. The rise was just as impressive in US$ terms, a 37 cent jump to break through the 1000 cent mark to 1022 as the FRX was stable for the week at 77.50 cents. The market looks to be performing well in regard to FRX movements. 12 months ago the A$ was 66.50 cents - 16% less than the current level. The fear that medium micron wools (19 and broader) were getting left behind in the market rise were allayed this series as they posted the largest gains, 18s and coarser gained 60 to 85 cents (some better style types were up to 100 cents dearer). Fine fleece types did ascend also but the gains were restricted to 20/30 cents, a nice warm-up for the designated super-fine sale in Sydney next week. Skirting price movements were based purely on VM. All types < 3% VM with good AM results added 35 to 55 cents for the week with all burrier types fully firm. The carding sector continued on from the losses of the past fortnight to average a 17 cent loss over the 3 centres. LKS/CRT, broader than 17.5 micron, fell by 10/20 cents with STN taking the brunt of the losses retreating by 40 to 60 cents. Crossbreds had a mixed sale with combing types solid to 40 cents dearer but burry carding types and XB LMS were punished with some lots receiving only token bids. We passed-in 55% of all our XB LMS offered with talk that the road ahead for XBs could be a long one before there is any sign of improvement.

The EMI is closing in on 12 month highs. Not since March last year has the market been at these levels when the full effects of the pandemic were being realised. The market has risen by 161 cents (14%) since the resumption of sales with the gap between 18 and 21 micron widening. At the opening sale in January it was 444 cents with the gap extending to 569 cents this sale. The old saying was that 18 microns should be 50% higher than 21s (which is now getting close), 1294 to 1851 is a 43% difference. The gap going broader was much the same, 28 micron should always be running at about 50% of what 21s are worth. This is certainly not the case with 21s at 1294 and 28s only at 515 cents again about 40%. As we mentioned earlier the Lunar New Year can adversely affect the wool market. Enquiry from China was reportedly slowing early in the week but very quickly changed to talk of new business being written in China and conversion to forward contracts from India. Exporters commented on how easily the new competition transferred price pressure onto all users as levels rose. Traders dominated the merino combing sectors with topmakers and indent buyers unwilling to be convinced of the longevity of current price levels. Processors and topmakers looked to XBs and cardings for value for money as competition displayed buying patterns pre-pandemic economy methods of operations. Something that has come to light is the delays in shipping wool to China. The ships seem to be getting held up in Singapore and delays of 2 to 4 weeks are common which is holding up wool deliveries to China and tying up critical finance that can be used for future purchases but has not had an adverse effect on the market to date.

        Southern Aurora Fwd Prices            

Micron

Date

Low

21

Apr/May 21

1310

Main Buyers (This Week)

1

Techwool

6659

2

Fox & Lillie

4692

3

Endeavour Wool

3375

4

United Wool

2871

5

Kathaytex Aust.

2553

6

PJ Morris

2515

Eastern Market Indicators (AUD cents/kg clean)

1318 cents é 42 cents compared with 12/02/2021

Northern Market Indicators (AUD cents/kg clean)

1392 cents é 40 cents compared with 12/02/2021

   AUD/USD Currency Exchange

0.7751 é 0.0025 compared with 12/02/2021