Weekly Market Reports


1 May 2020

admin Macwool - Friday, May 01, 2020

 WEEKLY MARKET REPORT 

Week Ending 1st May, 2020

 AWEX Northern Micron Indices Comparison

AWEX INDEX

This Week

S44/19

This Week

M44/19

Last Sale

S43/19

Sydney

Change

Last Year

Sydney

Sydney Yearly

Change

17

1697

1695

1749n

-52

2493

-796

18

1518

1519

1593

-75

2425

-907

19

1414

1437

1483

-69

2304

-890

20

1362n

1382

1443

-81

2278

-916

21 - 1370 1459n (M) -89 (M) 2260 (M) -890 (M)
26 835n 861n 865 (M) -4 (M) 1515n -680

28

661n

668

674n

-13

1303n

-642

30

-

478n

484 (M)

-6 (M)

1005n (M)

-527 (M)

MC

840n

843n

865n

-25

1094

-254

AT LEAST IT’S RAINED!!

The market suffered further losses this week as sentiment seems to go from bad to worse. The AWEX EMI gave up another 47 cents to 1225 ( a 5 year low) but just 2 cents in US$ terms to 800 as the FRX appreciated to 65.40 cents (up by 2.25 cents - 3.5%) almost the identical amount the market fell by - 3.7%. Unfortunately the losses aren’t attributed to just the FRX movements.  Virtually no sector was immune from the rapidly declining demand causing all fleece microns to fall by 50 to 90 cents as discounts widened for the dustier types but the better types (and some NM lots) sold to solid competition or even dearer rates. Skirtings fell by 20 to 50 cents while cardings retreated by 10 to 30 cents and crossbreds lost 10 to 40 cents depending on micron. 32 micron is at 270c clean, its lowest point for 23 years. This weeks losses caps off 2 disastrous months for the wool market. April saw the EMI fall by 76 cents (4.7%). This was minor compared to March - a collapse of 294 cents, 11.8%. Looking back to earlier in the year the price shifts were minor as January lost just 10 cents while in February the EMI gained 33 cents, certainly an erratic shift.

The fall in the market and the spread of Covid-19 that has whole countries in lockdown has seen retail spending collapse cannot be underestimated. March figures coming out of the USA saw retail spending slump by 8.7% compared to February, manufacturing output was back by 6.3% and industrial production shrunk by 5.4%, the largest fall since WWII. Buyers were adamant that even with restricted demand national catalogues of 35,000/week would be able to be absorbed. The average weekly offering has been 36,000 over the past 8 sales and just 24,000 in April but this has been a bridge too far. Most of the recent falls came in a period when New Zealand and South Africa had suspended wool sales but now both are back online - SA holding a sale via “Zoom” last week and back into the Port Elizabeth sale rooms from now and NZ selling, scouring and shipping wool again. Even though some form of normality is returning to China as shopping centres reopen, large retail outlets are reporting business is 20% below normal throughput before the shutdown as early stage processing in China is continuing but temporary closures for most combing mills are still in force in Europe, Malaysia and South America. Further down the chain a gradual lift in restrictions is giving some middle and end stage processors in Europe a gradual cranking up of machinery. Many astute judges believe the wool market still has some way to fall while others think that we are close to the bottom as the more production comes online, prices will rise in time but not till late 2020 (even into 2021). Talk about an each way bet!! At least it’s rained again!!

         Southern Aurora Fwd Prices            

Micron

Date

Low

21

June 20

1330

Main Buyers (This Week)

1

Techwool

2803

2

Endeavour Wool

1686

3

Tianyu Wool

1660

4

United Wool

1315

5

Seatech Ind.

1101

6

Aust. Merino

999

Eastern Market Indicators (AUD cents/kg clean)

1225 cents ê 47 cents compared with 24/04/2020

Northern Market Indicators (AUD cents/kg clean)

1259 cents ê 48 cents compared with 24/04/2020

AUD/USD Currency Exchange

0.6534 é 0.0226 compared with 24/04/2020

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