Weekly Market Reports


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

12 February 2021

Friday, February 12, 2021

 WEEKLY MARKET REPORT

Week Ending 12th February, 2021

 AWEX Northern Micron Indices Comparison

AWEX INDEX

This Week

S33/20

This Week

M33/20

Last Sale

S32/20

Sydney

Change

Last Year

Sydney

Sydney Yearly

Change

17

2125

2142 2123
+2 2063n +62

18

1786

1806

1780

+6

1928

-142

19

1536

1547

1532

+4

1833

-297

20

1340

1333

1346

-6

1803

-463
21 1223n 1224 1243n -20 1773n (M) -549 (M)
 26 - 734n 799n (M) -65 (M) 1160n (M) -426 (M)

28

510n

518

555n

-45

866 (M)

-348 (M)

MC

889n

892n

898n

-9

1108n

-219

HAPPY CHINESE NEW YEAR, HOPEFULLY!

Since the big rise of 2 weeks ago the market had pretty much marked time but, by the numbers, has cheapened up slightly. The AWEX EMI lost 10 cents this sale to 1275 following on from the 6 cent fall the previous series with XBs, cardings and broader merino fleece types (20 micron and stronger) the main contributors to the EMI falling. This week’s largest offering since the opening sale of the year and the strengthening FRX gave buyers an opportunity to relax their buying patterns and take stock of what has been a frantic start to the year. With the stronger A$ the market rose slightly in US$ terms, up by 6 cents to 985. The merino combing types fared well despite the increased volume with all microns adding up to 10 cents bar 20s and broader which lost 5 to 20 cents. The worry for these broader types is the increase in volume of these microns due to the good season pushing clips broader with many growers reporting their wool 1 to 1.5 micron coarser than last year. The demand for these broader types has not increased as the volume has; with the opposite effect on finer clips - less in volume and increased demand. The pattern of price movements was the same in the merino skirting sector, fully firm for types < 20 micron but 10 to 20 cent losses for the broader types. A we mentioned earlier the fall in cardings contributed to the overall fall in the market. Washing types (< 2% VM) finished the sale unchanged with the 3% VM and higher lots losing 10/20 cents for the week. The MCI in Sydney fell below 900 cents to 898 - a loss of 11 cents. Just when we thought (and hoped) XBs may be on the long road to recovery, they took a large hit and were the main reason the EMI fell this week, all microns fell between 10 and 60 cents (5 to 8%).

Melbourne featured an excellent selection of Tasmanian wool this sale which seemed to woo the Italians from their slumber to underpin the solid market and increasing demand for fine and superfine types with these MPGs adding up to 45 cents in the south. You would expect these wools to be top prices for the week but it was a few lots from our colleagues in Cooma, Gordon Litchfield Wool, that sold two 14 micron lots for 3140 and 3020. Traders dominated the top positions of buying lists with top-makers, processors and indent operators all keen to purchase for their immediate needs. Apart from Chinese mills providing the backbone for current prices and the Italians chasing the “top end” clips, the largest European top-maker continues to operate with a smattering of Indian orders competing as well.  

Today marks the start of Chinese New Year, sometimes a tricky part of the year to sell wool. Many businesses are now closed for a week to 10 days which may cause difficulty in financing wool purchases for the next 2 sales. Reports have some mills already closed, some taking a 4 week shutdown and others working through the festive season to avoid workers returning from other provinces having to quarantine for 14 days. Some reports also suggest that a bit of “stocktaking” has happened over the past few sales even with demand further down the processing pipeline less than expected or needed. There is still plenty of showfloor chatter that massive uniform orders from the Chinese government are set to be placed at any time - most likely post Chinese New Year. Speculation is rife on the volume and make-up of the types of wools they will be purchasing but when it happens will it be like the charge of the light brigade?

        Southern Aurora Fwd Prices            

Micron

Date

Low

21

Apr/May 21

1265

Main Buyers (This Week)

1

Techwool

6135

2

Fox & Lillie

3804

3

Endeavour Wool

3638

4

Lempriere

2765

5

Aust. Merino

2718

6

Tianyu Wool

2613

Eastern Market Indicators (AUD cents/kg clean)

1275 cents ê 10 cents compared with 05/02/2021

Northern Market Indicators (AUD cents/kg clean)

1352 cents ê 10 cents compared with 05/02/2021

   AUD/USD Currency Exchange

0.7726 é 0.0110 compared with 05/02/

5 February 2021

Friday, February 05, 2021

WEEKLY MARKET REPORT

Week Ending 5th February, 2021

 AWEX Northern Micron Indices Comparison

AWEX INDEX

This Week

S32/20

This Week

M32/20

Last Sale

S31/20

Sydney

Change

Last Year

Sydney

Sydney Yearly

Change

17

2123

2105 2144
-21 2080 +43

18

1780

1778

1780

0

1943

-163

19

1532

1529

1537

-5

1834

-302

20

1346

1345

1340

+6

1800

-454
21 1243n 1243 1273 -30 1789n -546
 26 795n 799n 785n +10 1091n -206

28

555n

550

531n

+24

819n

-264

MC

898n

908n

906n

-8

1118n

-220

IT’S A BILLION DOLLAR INDUSTRY- OFFICIALLY!

This time last week there was some nervousness about whether the market could hold its ground after a decade long record lift of 134 cents. Fremantle’s close last Thursday saw most categories cheaper and we all thought that we could see a retreat of 30-40 cents. Fortunately this was not to be although there was some softness in patches but we look at 45,126 bales being offered which was over 5000 bales more than the previous week and one can feel reasonably happy with the slight adjustment.

This week gross sales of the Australian wool clip passed the 1 billion dollar mark which it has done every year for quite some time. This year it has taken five weeks longer to reach the milestone than last year which, when all is taken into account, is not such a bad result compared to what might have been when we were looking at the sub 1000 EMI last Spring. Hopefully we can report the 2 billion dollar mark before the end of June.

The export destination figures tell the true story of who is almost singlehandedly pushing this market along. YTD China has purchased 86% of our wool but trade sources of recent weeks say the figure is higher and over 90%. Many are asking should we be nervous about this kind of domination. The simple answer lay in the fact that the other competing destinations are simply not buying and without China who knows where this market may be? Information out of Europe has downstream processors showing year-on-year trading results down between 30% and 65% so orders are just not being placed whilst they trade out of their stock positions. Meanwhile China’s economy which faltered momentarily has rebounded on the back of strong domestic sales, particularly in the prestige apparel end. Wealthy Chinese shoppers are forced to shop at home with borders closed hence a big jump in high end fashion sales domestically. Wool has managed to avoid any of the geopolitical tensions that have affected other commodities. Wool is one of the longest traded commodities with China going back to the beginning of China’s more recent emerging affluence. Wool is a product that has a lot of value adding in China and the textile industry rates second in terms of contribution to GDP. The other helpful factor is that there are many strong, long standing relationships between the Chinese mill operators and the Australian wool industry. These relationships become critical when there is some turbulence about.

A quick glance at the above table far right sees that the gap YOY has completely closed sub 17 micron. In fact they are worth more now than 12 months ago. The 18 & 19 micron sectors are looking a lot better as well but I would be cautious just yet that the medium categories can close the gap too much in the short term. Seasonally we are beginning to see clips over a micron broader than last year so it’s easy to see where there will be some pressure on fine wool coming out of drought. I would not be as hopeful for wool above 19 micron as current production is quite plentiful.

A larger offering again next week will test the market with 52,822 bales being offered. Macwool/Carmichael will offer 1235 bales on Tuesday. Early mail suggests maybe a firm trend.

        Southern Aurora Fwd Prices            

Micron

Date

Low

21

Apr/May 21

1240

Main Buyers (This Week)

1

Techwool

7734

2

Endeavour Wool

3945

3

Fox & Lillie

2879

4

Tianyu Wool

2470

5

Kathaytex Aust.

2346

6

United Wool

2290

Eastern Market Indicators (AUD cents/kg clean)

1285 cents ê 6 cents compared with 29/01/2021

Northern Market Indicators (AUD cents/kg clean)

1362 cents ê 7 cents compared with 29/01/2021

   AUD/USD Currency Exchange

0.7616 ê 0.0015 compared with 29/01/2021

29 January 2021

Friday, January 29, 2021

WEEKLY MARKET REPORT

Week Ending 29th January, 2021

 AWEX Northern Micron Indices Comparison

AWEX INDEX

This Week

S31/20

This Week

M31/20

Last Sale

S30/20

Sydney

Change

Last Year

Sydney

Sydney Yearly

Change

17

2144

2118 2012
+132 2038 +106

18

1780

1781

1651

+129

1893

-113

19

1537

1533

1396

+141

1795

-258

20

1340

1349

1230

+110

1753

-413
21 1273 1267 1163n +110 1731n -558
 26 785n 793n 715n +70 1081n -296

28

531n

541

461n

+70

803n

-272

MC

906n

911n

818n

+88

1114n

-208

BIG JANUARY LIFT IS DELIVERED AGAIN!

Melbourne’s dearer market on the final day of last week’s sales was just a taste of what was to come this week as all buyers unanimously were predicting a dearer market by at least 30 cents. This would have the market in the north rise by a minimum of 60 cents as we were well behind the Melbourne stand-alone market of last Thursday when some of their MPGs added up to 60 cents. From the opening lot prices skyrocketed with every fleece indicator in Sydney adding 100 to 140 cents to their previous values. The final day’s auction was more subdued with modest increases being recorded but, looking at some of the individual prices, some were better and some slightly cheaper than the quotes AWEX released after the sale. Most buyer sentiment was that the market “had the wobbles”. Still, by week’s end, it was a great result as the AWEX EMI climbed by 89 cents to 1291 cents with a 51 cent rise in US$ terms to 985 as the FRX fell by 1.5 cents to 76.25. All fleece indicators added 110 to 145 cents with virtually no type neglected and discounts for VM or any other fault shrinking as just 3.3% of the fleece offering in the north failed to sell. Skirtings were also swept up in the mad dash for wool as the large increases on the opening day were followed up by small gains in the final session but no hint of the market getting the jitters. Overall increases were 150 cents for the < 18 micron, < 2% VM types out to 19 micron jumped by 90 to 120 cents with the broader types looking 70 to 90 cents dearer. Of course, growers welcomed these substantial gains as just 36 bales-2.1%- failed to sell. Cardings also had major gains as the 3 centres’ MCIs are now all above 900 cents, 906 to 952 with the Sydney and Fremantle MCIs lifting by an average of 86 cents as all types in this sector (finer than 19 micron) added 100 to 130 cents with the broader selection 60/80 cents to the good. Crossbreds had their largest weekly rise since late October with 26.5 and finer adding 60 to 80 cents with the broader microns posting gains of 50/70 cents.

History tells us that for quite some years the market experiences a big lift in January. This year we had to wait till the final week of the month - but it happened. A 7.3% gain in the market for this series sees it at its highest point since mid-April with 19s and finer actually higher by as much as 459 cents (16.5 micron) with the broader wools up to 215 cents cheaper (21s). The recent pattern before Christmas when a big rise was on the market would react swiftly in the opposite direction and lose all the gains and momentum just as quickly. When the market has triple figure gains selling anything at the new level becomes almost impossible, 2 major buyers we spoke to yesterday said they hardly sold a bale on Wednesday night. This lack of sales became apparent in Fremantle late yesterday when the market gave up some of Wednesday’s gains - 20s and 21s now 65 and 90 cents behind the East coast levels with < 19.5 10 to 30 cents lower. This doesn’t auger well for next week as most forecasts are for a market to react in the negative hopefully not to the extent that we saw on several occasions pre-Christmas.

Traders and their Chinese counterparts led the price recovery this week. Bids well above the market were being received late last week and on Monday which quickly converted into instant and steep price rises in the opening session. The call for new business followed the rising market injecting further impetus into the gains. The smaller than anticipated offering of <40,000 bales and the depreciating FRX and demand from new forward and relatively prompt shipment orders also contributed to the (at times) frantic buying. 47,000 bales are on offer next week. Hopefully the EMI stays above 1250 cents.

        Southern Aurora Fwd Prices            

Micron

Date

Low

21

Apr/May 21

1220

Main Buyers (This Week)

1

Techwool

4984

2

Endeavour Wool

3795

3

Fox & Lillie

3680

4

United Wool

3010

5

PJ Morris

2488

6

Kathaytex Aust.

2229

Eastern Market Indicators (AUD cents/kg clean)

1291 cents é 89 cents compared with 22/01/2021

Northern Market Indicators (AUD cents/kg clean)

1369 cents é 112 cents compared with 22/01/2021

   AUD/USD Currency Exchange

0.7631 ê 0.0142 compared with 22/01/2021

22 January 2021

Friday, January 22, 2021

WEEKLY MARKET REPORT

Week Ending 22nd January, 2021

 AWEX Northern Micron Indices Comparison

AWEX INDEX

This Week

S30/20

This Week

M30/20

Last Sale

S29/20

Sydney

Change

Last Year

Sydney

Sydney Yearly

Change

17

2012

2038 1907
+105 2082 -70

18

1651

1693

1592

+59

1917

-266

19

1396

1428

1389

+7

1809

-413

20

1230

1266

1246

-16

1778

-548
21 1163n 1169n 1180 -17 1766 -603
 26 715n 720 721n -6 1111n -396

28

461n

483

460n

+1

838n

-377

MC

818n

871n

789n

+29

1145n

-327

MARKET CRACKS 1200 HELPED ALONG BY SUPERFINES!

The market continued on from the solid start of last week with all sectors of the market fully firm to dearer. The national catalogue was predicted to be 54,000 bales early last week but was reduced heavily to 44,250 by the close of selling in Melbourne on Thursday, a drop of 18%. The pass-in rate fell to 7.6% with the dearer market to see 40,880 bales sold. The AWEX EMI gained 30 cents (2.5%) to 1202 and 27 cents in US$ terms to 934 as the A$ ascended slightly (77.70c), a change of 0.25%. Emphasis was on the sub 18.5 micron types in both sale rooms with fleece types 17 and finer posting gains of 105 cents while 17.5 to 18s added 60/75 cents and 19.5 in buyers’ favour and broader microns -15 cents. Skirtings added some impressive numbers from the opening sale as 18s and finer lifted 60 to 90 cents with broader lots 20 to 40 dearer. The carding sector again performed well with the 3 centres averaging a 41 cent gain. The cut off point for gains was similar to their combing counterparts; 18 micron and finer gained 35 to 50 cents while broader types lifted by 20/30. Crossbreds also had a reasonable sale as 26 and finer were in buyers’ favour with broader lots up to 10 cents dearer. As was the case last week, growers were looking for more of an increase as 17% was passed-in.

Finer wools certainly look to be the flavour of the month. The push for < 18 micron types started before Christmas and has continued in earnest over the past 2 sales. Broader wools seem to be in a holding pattern with the difference between 16.5 and 21 micron in Melbourne 1,055 cents (2224 to 1169) - this gap a long term average price difference. The gap in July (Sale 1) was just 500 cents, 1694 to 1194. One reason given for the widening price differential is the change of micron profile over the past 12 months. With good seasonal conditions over a vast area of wool growing districts the clip has broadened up with sheep not suffering from drought conditions and wools 19 micron and broader becoming more abundant and less wool finer than 18 micron. This situation is a complete reversal to what was happening in the drought.

As has been the case for some time Chinese buyers and forward traders dominated the market along with their top-makers and indent buyers. Showfloor chatter centered around the potential for large Chinese government uniform orders being placed. This is in stark contrast to the trouble that other exporters are having with China as their government is one of our largest single customers. Enquiry for forward offers continue to flow from the sub-Continent and Europe but the successful conversion rate to written orders is a long way off normal support from these two important destinations. The recent announcement that the tariff-free quota in China for the import of clean Australian wool is to be increased by 5% is welcome news. The increase of 3,600 tonnes of clean wool is part of the scheduled increase of 5% each year until 2024 when the quota will reach 44,300 tonnes. The rest of the clip that is shipped to China attracts just a 1% tariff which sees in this financial year 38,300 tonnes of clean wool which equates to 333,000 greasy bales free of tariff.

Next week’s national offering is very similar to this sale, 44,000 bales. The market finished very strongly in Melbourne on Thursday when they sold in isolation. As the market stands at the moment, 16.5 to 20 micron is averaging 40 cents higher in Melbourne than Sydney with all participants expecting our market to catch up to Melbourne next week when sales resume.

        Southern Aurora Fwd Prices            

Micron

Date

Low

21

Mar/Apr 21

1180

Main Buyers (This Week)

1

Techwool

5059

2

Endeavour Wool

4396

3

Tianyu Wool

3501

4

PJ Morris

2953

5

Fox & Lillie

2842

6

United Wool

2812

Eastern Market Indicators (AUD cents/kg clean)

1202 cents é 30 cents compared with 15/01/2021

Northern Market Indicators (AUD cents/kg clean)

1257 cents é 24 cents compared with 15/01/2021

   AUD/USD Currency Exchange

0.7773 é 0.0032 compared with 15/01/2021

15 January 2021

Friday, January 15, 2021

 WEEKLY MARKET REPORT

Week Ending 15th January, 2021

 AWEX Northern Micron Indices Comparison

AWEX INDEX

This Week

S29/20

This Week

M29/20

Last Sale

S25/20

Sydney

Change

Last Year

Sydney

Sydney Yearly

Change

17

1907

1910 1871
+36 2122 -215

18

1592

1627

1578

+14

2005

-413

19

1389

1390

1390

-1

1909

-520

20

1246

1245

1249

-3

1878

-632
21 1180 1162 1180n 0 1870 -690
 26 721n 728 710n +11 1195n -474

28

460n

471

460n

0

914n

-454

MC

789n

815n

764n

+25

1123n

-334

A SOLID, STEADY START!

It’s been 4 weeks since our last report and plenty has happened on a global front. Political chaos in the US, the pandemic almost out of control in many countries with vaccines released (but slower administering than governments would like) to good summer storms over big areas to set up a good late summer season and the recommencement of wool sales. All participants were nervous about the start of sales for the new year: a big anticipated offering for the opening 2 sales of 111,500 bales and the appreciating A$ over the recess to above 78 cents last week (3% higher than the close before Christmas) led to talk of the market losing 30/50 cents and, in fact, a tough 2/3 weeks was all the talk with the large volumes and the high FRX. By last Friday the chatter had turned positive to have a market solid at least for the biggest sale since March. The EMI lifted by a modest 15 cents to 1172 and 33 cents to 907 in US$ terms due to the rising A$. The finer microns < 18.5 performed the best gaining 10 to 60 cents - the finer the micron the higher the rise as 19s and broader look to be in a holding pattern. Skirtings also added to their pre-Christmas values with identical gains to the fleece wools, finer than 18 micron 10 to 60 cents higher with the increases higher with the finer microns. Cardings also had a good opening to the year with the 3 centres averaging a 38 cent rise with all types in this sector rising by 10 to 50 cents. The large XB catalogue (24% of the national total) was the least performing sector of the sale with all buyers struggling to do business and recovery could be a long time off. The market was in sellers’ favour (up by 10 cents) but growers were looking for bigger increases as 20% was passed-in.  

As far as the national volume was concerned it was the same old story as last year. The original quantity on offer didn’t eventuate as Monday’s forecast of 56,840 shrank to 52,290 - a reduction of 4,550 (8%) with a pass-in rate of 11% saw 46,500 bales sold to the trade. Focus was on the sub 18 micron types as the improved seasonal conditions in a lot of wool growing areas will see microns broaden out with less super-fine types available. On the Chinese processor side, the current lack of competition from Europe and India in the super-fine sector has opened up big export opportunities for them to supply yarn and tops to these destinations. Traders and Chinese top-makers dominated all sectors buying lists.  

Away from wool sales but certainly related is the current shortage of shearers on the Eastern seaboard. All contractors are reporting of a big shortage of shearers and shed staff. Many contractors are running well behind schedule and are splitting teams to try and catch up. We know of several clients that had shearing booked in well before Christmas that are still on a “waiting list“ or just getting sheep shorn now. Weekend shearing and growers offering to pay over $4.00/head to attract shearers is not uncommon. The problem has been brewing for months now which has been exacerbated by the pandemic. Early last year when international travel was closing down a lot of Kiwi shearers went home and have not been able to travel back to Australia. Also the shearing rate in NZ has lifted substantially to now be comparable to the rate here. This will help Kiwis stay at home where they can earn the same $ that they would have here and contend with a lot less merinos there thus depleting shearer numbers here for the long term, not just while Covid-19 is on the radar.  Also the closed borders in Australia late last year prevented any interstate travel which is part of normal shearing practice. Shearing shed and accommodation standards are always a problem and some contractors are saying if these are not up to a certain standard they may be in a position to “pick and choose” their sheds depending on the facilities or lack of. Just under 50,000 bales are on offer next week with a solid market all the talk.

        Southern Aurora Fwd Prices            

Micron

Date

Low

21

Mar/Apr 21

1160

Main Buyers (This Week)

1

Techwool

7584

2

Endeavour Wool

4862

3

Fox & Lillie

4062

4

Tianyu Wool

3959

5

Lempriere

3734

6

United Wool

2747

Eastern Market Indicators (AUD cents/kg clean)

1172 cents é 15 cents compared with 16/12/2020

Northern Market Indicators (AUD cents/kg clean)

1233 cents é 15 cents compared with 16/12/2020

   AUD/USD Currency Exchange

0.7741 é 0.0189 compared with 16/12/2020

18 December 2020

Friday, December 18, 2020

 WEEKLY MARKET REPORT

Week Ending 18th December, 2020

 AWEX Northern Micron Indices Comparison

AWEX INDEX

This Week

S25/20

This Week

M25/20

Last Sale

S24/20

Sydney

Change

Last Year

Sydney

Sydney Yearly

Change

17

1871

1865 1903
-32 2005 -134

18

1578

1570

1623

-45

1907

-329

19

1390

1392

1442

-52

1818

-428

20

1249

1248

1300

-51

1792

-543
21 1180n 1181 1230n -50 1783n -603
 26 710n 728n 740n -30 1180n -470

28

460n

469

500n

-40

914n

-454

MC

764n

778n

765n

-1

1071n

-307

ANNUS HORRIBILIS BUT … HAVE A MERRY CHRISTMAS!

As the Queen stated at the end of 1992 the year has been “annus horribilis”. The collapse of her 3 children’s marriages and the near total destruction of the much beloved Windsor Castle prompted this statement from her. Fast forward 28 years and the same could be said for 2020 on so many fronts. From devastating bushfires and the continuing drought early in the year and floods that broke the drought and floods now to Covid-19 spreading like wildfire across the globe claiming 1.66 million lives and infecting 75.270 million people on the planet. This year has been like no other in many generations. The wool market continued to be erratic right till the final sale this week. The market gave back nearly all of last series’ gains as the AWEX EMI fell by 41 cents to 1157 the majority of the losses coming in the opening session. The losses in US$ terms was less than half in A$ terms, just 18 cents to 874, this due to the ascending A$ up above 76 cents this morning (a 3 year high against the greenback) a worry for exporters of raw materials. Finer fleece microns < 17.5 fell by 15 to 30 cents with 18s and broader dropping by 45/50 cents. Fine skirtings < 17.5 micron opened cheaper but found solid support in the final session to finish the sale up to 10 cents dearer while the coarser types lost 35 to 55 cents down. There was very little movement in the Carding sector as the MCI lost just 1 cent to 764 with the 3 centres’ MCIs well and truly aligned, 778 to 764. Crossbreds followed the merino combing market to fall 25 to 40 cents for all microns. The passed-in rate blew out to 18%. The big, anticipated offering of 49,000 bales didn’t eventuate with 44,800 being offered (9% withdrawn) combined with the high passed-in rate saw just 36,600 bales sold. One highlight was the highest price in Sydney on our sale day, (3rd highest for this week’s sale and 7th highest in Australia this week) was achieved by one of our Carmichael clients, Carla & Darren Hepburn from Delegate, a 2 bale line of 14.9 micron-0.3VM-72.5yld, 90mm-26nkt made 1898 to be processed by Raymond Industries in India.

The EMI level of 1157 is 401 cents below last Christmas’ price of 1558, back by a whopping 25.7%. The year’s peak was in the opening sale of the year in January when it climbed to 1609 with the low point of just 858 cents in early September, a massive swing of a 47%. The volatility seen over many weeks of this year (in particular these last 6 months) has been unprecedented. The largest weekly drop was 155 cents in late March, 1442 to 1287, followed by a 128 cent fall in the resumption of sales in August. The biggest weekly rise was in October when the EMI climbed by 102 cents to 1219. The sale the previous week before saw a 95 cent leap, 197 cents for the fortnight!! Added to this was the disruption to the main software provider, Talman, in February resulting in the cancellation of Sale 35. All of this combined the challenges that the pandemic brought with it that came very close to having wool sales cancelled in Melbourne and all centres adhering to tight government health regulations with non-essential staff and no clients traveling to wool sales and reps unable to visit shed starts added to the pressure of selling wool in very uncertain times.

The wool market was coming off the “Super-cycle” but was exacerbated by the complete collapse in demand once the pandemic took hold. China is showing signs of recovering but our other major wool users have been much slower. The release of vaccines and more to come will give Northern hemisphere governments the confidence to lift lock-downs and restrictions and a return to normal work and consumer spending habits will help get demand for wool back to a good level. Sales are in recess till week of 11th January. We hope everyone can enjoy a great Christmas and New Year break.

        Southern Aurora Fwd Prices            

Micron

Date

Low

21

Mar/Apr 21

1150

Main Buyers (This Week)

1

Techwool

5227

2

Endeavour Wool

4316

3

Tianyu Wool

4057

4

Modiano

2192

5

United Wool

1911

6

Fox & Lillie

1887

Eastern Market Indicators (AUD cents/kg clean)

1157 cents ê 41 cents compared with 11/12/2020

Northern Market Indicators (AUD cents/kg clean)

1218 cents ê 39 cents compared with 11/12/2020

   AUD/USD Currency Exchange

0.7552 é 0.0109 compared with 11/12/2020

11 December 2020

Friday, December 11, 2020

 WEEKLY MARKET REPORT

Week Ending 11th December, 2020

 AWEX Northern Micron Indices Comparison

AWEX INDEX

This Week

S24/20

This Week

M24/20

Last Sale

S23/20

Sydney

Change

Last Year

Sydney

Sydney Yearly

Change

17

1903

1918 1826
+77 1925 -22

18

1623

1638

1554

+69

1815

-192

19

1442

1454

1382

+60

1723

-281

20

1300

1290

1240

+60

1708

-408
21 1230n 1235 1178n +52 1705n -475
 26 740n 759n 723n +17 1120n -380

28

500n

503

480n

+20

840n

-340

MC

765N

763N

740N

+25

1040N

-375

MARKET RISES 2 DAYS RUNNING!

The penultimate sale of the year finally delivered some good news for growers as the market strung together 2 consecutive days of gains, something it hadn’t done since mid-October. The AWEX EMI climbed by 54 cents (4.7%) to 1198 - its highest point since early November. The rise was more impressive in US$ terms with the market adding 47 cents (5.7%) to 892 as the FRX steadily increased over the week to sit at 74.40 cents (a 1% rise). The market is at its highest point since early March in US$ terms. The market started off on a dearer note following on from the positive sentiment in last sale’s final session. Competitive tension was ramped up on the final day to see prices go higher as all fleece microns added 50 to 75 cents for the week. The market cleared 98.5% of the fleece on offer to have just 75 bales unsold. Skirtings also benefitted from the renewed competition as finer < 18.5 micron and low VM (< 1.5) types lifted by 80 to 100 cents with broader lots gaining 40 to 60 cents. Growers again were happy with the rising market as just 35 bales failed to sell - a 98% clearance rate. Cardings continued their recovery as < 17.5 micron LKS, STN and CRT lifted by 40 to 60 cents with broader types being quoted 20/40 dearer. The collapsing XB market was halted as gains ranged from 20 to 40 cents - a welcome lift after the month long battering they’ve taken. The 37 cent gain for 32 micron equated to a 15% rise!!

This week’s sale was the final opportunity for buyers to buy and, more importantly, ship wool before Christmas. This sense of urgency was evident from the outset and lasted through to the final lot knocked down in Fremantle. Topmakers and traders dominated the buying lists with indent buyers less active. Indents are usually volume based and the lack of normal buying % is indicative of some semblance of price sensitivity being reached. Trader may have met factories’ needs with price surety rather than indenting the next day. The promise of a Covid-19 vaccine has finally arrived with the first vaccinations administered in the UK this week. Russia has been vaccinating for a few weeks but without any medical approval that would stand up in the West. The FDA in the US is set to approve 2 more vaccines anytime now and vaccinations will commence there before Christmas. This will come as a great relief to planet Earth. As lockdowns and social distancing are wound back people will be able to resume work and re-engage with their shopping urge. This will be more than welcome by retailers who have been sweating on consumers getting back into shops and spending money again. What effect will this have on the demand for wool?? An increase hopefully and sooner rather than later. Many buyers have spoken about how much and when the button is pushed for an increase in demand that filters through to greasy wool prices making a comeback. Their opinion of price rises is hundreds of cents apart. Time will tell. Will wool be caught up in the current trade spat between China and Australia?? The advantage we have is that we grow 80% of the world’s merino wool with South Africa, Argentina and Uruguay supplying the rest. The other crucial commodity they need is Iron ore. It also has failed to be mentioned in regards to higher tariffs.

Next week sees the final sale of the year. The national catalogue climbs to 49,000 bales (the largest since early March), up by 10,000 on this week which was the biggest in 8 months. This bigger offering is a result of the lifting market this week and growers wanting to sell before the 3 week Christmas recess. Market might open on a cheaper note but may strengthen on the final day. A good result given the size of the offering and the trades angst to absorb a catalogue well over 40,000 bales.

        Southern Aurora Fwd Prices            

Micron

Date

Low

21

Mar/Apr 21

1200

Main Buyers (This Week)

1

Techwool

5427

2

Endeavour Wool

4213

3

Tianyu Wool

3889

4

Fox & Lillie

2891

5

Aust. Merino

2319

6

Lempriere

1439

Eastern Market Indicators (AUD cents/kg clean)

1198 cents é 54 cents compared with 04/12/2020

Northern Market Indicators (AUD cents/kg clean)

1257 cents é 49 cents compared with 04/12/2020

   AUD/USD Currency Exchange

0.7443 é 0.0063 compared with 04/12/2020

4 December 2020

Friday, December 04, 2020

 WEEKLY MARKET REPORT

Week Ending 4th December, 2020

 AWEX Northern Micron Indices Comparison

AWEX INDEX

This Week

S23/20

This Week

M23/20

Last Sale

S22/20

Sydney

Change

Last Year

Sydney

Sydney Yearly

Change

17

1826

1804 1844
-18 1908 -82

18

1554

1574

1560

-6

1808

-254

19

1382

1373

1377

+5

1706

-324

20

1240

1241

1234

+6

1683

-443
21 1178n 1169 1188n 0 1681n -503
 26 723n - 768n -45 1135n -412

28

480n

484

490n

-10

833n

-353

MC

740n

731n

734n

+6

1061n

-321

A VACCINE APPROVED!!

Once again the wool market followed a similar pattern of previous sales, volatile but on a much smaller scale. The market is looking for some defined direction but is unsure of which way to move. The big price swings that we saw in October and November have shrunk to minimal movements with the AWEX EMI down to single figure adjustments over the past 2 sales. The EMI lost 6 cents this week to finish at 1144 and, in US$ terms, the fall was identical to the gain of the previous sale (2 cents to 844). The FRX has risen over the course of the week to now sit above 74 cents. The market opened on a cheaper note but did firm up in the final session to have 19 micron fleece and broader in sellers’ favour with 17.5 to 19 5/10 cheaper and < 17 giving back some of last sale’s gains to fall 15 cents coming off the designated superfine sale, this buying strategy almost standard procedure. Skirtings sold to a similar pattern to the fleece but did finish the sale fully firm to 10 cents dearer. Cardings had a very solid sale with all types quoted as firm/unchanged except low VM (< 2%) LKS finer than 17.5 that were 30 to 40 cents higher. The crossbred sector continued to get cheaper as finer than 27 micron fell by 30 to 40 cents with the broader types unchanged. This sector of the market has fallen quite rapidly over the past 3 weeks with 26s making around 400 cents, 28s about low to mid 300s and a 30 micron fleece lot only mid 200s (based on 70% yield, < 2% VM). Crossbreds again made up the bulk of passed-in lots as the overall number was similar to last sale at 10%.

Buyers were reporting business enquiry and conversion to new orders was down a fraction on the week before thus the softer market on the opening day. It only took this slight price adjustment down to a level where exporters were more comfortable to be able to turn enquiry into sales. As a result most types were dearer and all buyers reported the final quotes that were sent to clients and mills were in fact higher than prices at the start of the sale but, with the averaging of individual lots not based on time period, the MPGs and indicators were not reflective of the closing levels. Purchases were evenly spread between processors, traders and indent operators.

As has been the case for several sales the anticipated national volume didn’t go close to what was finally offered. A look at the last 6 weeks of sales has an average of 12% of the initial offering withdrawn before sale. This, coupled with the passed-in rate that is averaging 15%, doesn’t leave a massive amount of wool that is actually sold to the trade.

The big news of the week has to be the emergency approval of a vaccine in the UK. The whole planet had been waiting for the past few months to see when and where the first approval would be. Vaccines will be rolled out as early as next week to the most critical in need, frontline medical workers and the elderly. This should be followed by the approval of 2/3 more vaccines before Christmas and vaccination programs to start in earnest early in the new year. This should have an immediate positive effect on the global economy as lockdowns and restrictions are wound back and people can go back to some form of normality pre Covid. As we can see in Australia the economy rebounded by a record level in the September quarter compared to the horror June quarter and the price of airline tickets and accommodation has trebled in the past 2 weeks as state lockdowns were eased. Hopefully this good news will see a genuine lift in global consumer spending in the new year on all goods including woolen clothing and products. According to all the good judges on the showfloor the market should be stable next week.

        Southern Aurora Fwd Prices            

Micron

Date

Low

21

Mar/Apr 21

1120

Main Buyers (This Week)

1

Techwool

5371

2

United Wool

3016

3

Endeavour Wool

3006

4

Tianyu Wool

2936

5

Lempriere

2175

6

Aust. Merino

1011

Eastern Market Indicators (AUD cents/kg clean)

1144 cents ê 6 cents compared with 27/11/2020

Northern Market Indicators (AUD cents/kg clean)

1208 cents ê 1 cent compared with 27/11/2020

   AUD/USD Currency Exchange

0.7380 é 0.0023 compared with 27/11/2020

27 November 2020

Friday, November 27, 2020

 WEEKLY MARKET REPORT

Week Ending 27th November, 2020

 AWEX Northern Micron Indices Comparison

AWEX INDEX

This Week

S22/20

This Week

M22/20

Last Sale

S21/20

Sydney

Change

Last Year

Sydney

Sydney Yearly

Change

17

1844

1824n 1806
+38 1980 -136

18

1560

1576

1570

-10

1863

-303

19

1377

1378

1386

-9

1744

-367

20

1234

1231

1229

+5

1713

-479
21 1178n 1167 1188n -10 1716n -538
 26 768n 783 798n -30 1168n -400

28

490n

488

559n

-69

855n

-365

MC

734n

746n

704n

+30

1054

-320

OUR RELIANCE ON CHINA GROWS!

This week’s sale played out as the several sales beforehand have done in regards to volumes and withdrawn wool and passed-in rates. The anticipated national catalogue of 41,500 bales never eventuated with 12% (5,000 bales) withdrawn prior to auction and, with a flat market, the passed-in rate dropped to 12% from 19% last series to have just 32,000 bales cleared to the trade - hardly a supply overload. For the 2nd time in the last 3 sales the AWEX EMI was restricted to single figure movements, just a 9 cent fall to 1150. With the strengthening FRX to 73.50 cents the market added 2 cents to its value in US$ terms to 846. It was a tale of 2 markets as merinos were mostly unchanged to dearer while the XB sector fell out of favour to suffer big falls. The fleece market started on a cheaper note but did finish the sale strongly with the inferior style types with poor test results (low yields, tender, high mid-breaks and high CVHs) dragging some MPGs into the red. With a designated super-fine sale in Sydney the superior offering saw 17 micron and finer add 25 to 40 cents and more (60/80) as the style improved while all other microns were 15 cheaper to sellers’ favour. All descriptions of skirtings added 10/20 cents from the previous series while cardings recovered all of last sale’s losses as all types in this sector climbed by 15 to 60 cents, the MCI adding 30 cents to 734. Crossbreds were the disappointing sector of the sale and directly contributed to the EMI losing ground. Finer than 26.5 micron fell by 30/50 cents while the broader types were hammered losing 50 to 80 cents with some individual microns falling by over 15%. Buying interest was from across the board from processors to indent operators and traders. When prices lowered or were filled in the opening session there was a quick buyer replacement that stepped in to maintain good competition and price levels indicating a strong book of orders for now.

Have we come to a new price level?? Taking out last week’s 30 cent fall the market, either side of that has barely moved. For the moment the wild volatility seems to have gone but the past 5 sales (10 auction days) has seen the EMI move 560 cents (up and down) a daily average shift of 56 cents. Over the past 3 weeks though the EMI has moved between 1189 and 1150, a 39 cent movement and taking out 2 days when the EMI was at 1188/1189 the shifts have been restricted to 1150 to 1161, a very tight price range.  What does this mean? Have we reached a price point that the wool pipeline is happy with and can all successfully pass on prices at a profitable level? Or are we in a holding pattern till the next upward shift (fingers crossed) or will  the 2nd wave of the pandemic in Europe and the seemingly out of control status in the US stifle demand  due to lockdowns and falling retail activity just when they are on their knees begging for some sort of global Christmas spending recovery. Or will health authorities give the green light to the 4/5 vaccines that are trialing with 70 to 90% success rate. There are reportedly 10s of millions of doses already produced awaiting approval - some maybe before Christmas. We can only hope.

Our reliance on China as a market this season has grown with them now taking 83% of the clip with the next 3 countries (India, Italy and South Korea) buying 8%. The recent “Singles Day” online shopping extravaganza saw $115 billion of merchandise change hands on just 2 major platforms - Alibaba and JD. Hopefully there is some restocking of retail shelves to happen. The importance of the well-heeled Chinese consumer has never been more important. Their woolen clothing purchases for 2019 of 125mkg is more than the next 3 countries combined, USA, Japan and Germany at 115 mkg. Next week’s offering of 41,800 will not make it to auction unless the market finds a new level.

        Southern Aurora Fwd Prices            

Micron

Date

Low

21

Mar/Apr 21

1120

Main Buyers (This Week)

1

Techwool

4916

2

United Wool

3168

3

Endeavour Wool

3078

4

Fox & Lillie

1896

5

Aust. Merino

1803

6

Tianyu Wool

1659

Eastern Market Indicators (AUD cents/kg clean)

1150 cents ê 9 cent compared with 20/11/2020

Northern Market Indicators (AUD cents/kg clean)

1209 cents ê 5 cents compared with 20/11/2020

   AUD/USD Currency Exchange

0.7357 é 0.0071 compared with 20/11/2020