Weekly Market Reports


12 June 2020

admin Macwool - Friday, June 12, 2020

 WEEKLY MARKET REPORT 

Week Ending 12th June, 2020

 AWEX Northern Micron Indices Comparison

AWEX INDEX

This Week

S50/19

This Week

M50/19

Last Sale

S49/19

Sydney

Change

Last Year

Sydney

Sydney Yearly

Change

17

1624

1604

1659

-35

-

-

18

1473

1483

1504

-31

2238

-765

19

1360

1368

1389

-29

2144

-784

20

1286

1280

1318

-32

2128n

-842

21 1268n 1250 1298n -30 2120 (M) -870 (M)
 26 820n 833n 823 (M) +10 (M) -

28

624n

613

615n

+9

1093n

-469

30

-

508

500n (M)

+8 (M)

914n (M)

-406 (M)

MC

874n

896n

884n

-10

997

-123

MARKET STUMBLES, TOO MUCH WOOL??

The market started this series on a solid footing which pointed to a 3rd week of rises but, unfortunately, this was not to be as losses in the final session saw the AWEX EMI retreat after a fortnight of positive movements. The EMI fell by 12 cents to 1171 and 8 cents to 813 in US$ terms as the FRX finished the week where it started, 69.50 after peaking at 70 cents earlier in the week. The falls were uniform across all microns - 30 to 35 cents with only the better style types less affected. Skirtings had a quiet sale to be quoted as firm/unchanged while cardings couldn’t continue their rising trend as the MCI lost 10 cents as high VM CRT/STN gave up 20 cents while fine LKS gained 15/20 cents. Crossbreds were solid for < 28 micron as broader types added 10 to 15 cents.

The short-term orders that saw the market stabilise over the past month look to have been filled for the time being. A contributing factor for the reversal in this series was the high number of fleece types that were unable to average the required 70% washing yield for many Chinese orders. Most mills are still very cautious to place new orders and these are for small quantities. There is, however, a better take-up of old existing orders down the pipeline but not in the volume needed to call this a full-blown recovery as early stage processors are still reporting cash flow problems. Short wool types for open top, knitted and semi-worsted processing look to be quicker to recover than the traditional worsted sector. Scoured and carbonised carding wools are also in increasing demand as the local Chinese market shows signs of a lift in consumer spending as more retailers open their doors and entice customers back in. Current prices are attractive right down the pipeline to the retailer but their main focus is to reopen and try to clear old stock at minimal losses before placing new orders for the Northern hemisphere autumn/winter season. The pipeline from greasy wool sold to Chinese retailers can be quick when the demand kicks in.

Showfloor chatter from the buyers seems to be concerned about volumes in the new season exceeding demand. Normally there is some wool that is held back from sale till the new financial year ticks over. We can’t see this happening (certainly not with us). In fact, many growers have had the need to sell wool/stock to finance their farming operations because of the Autumn break. For those holding wool the question is when to sell? Has the market bottomed out and how long will the wait be before prices get back to acceptable levels? The OECD forecasts 2 years before global economic activity returns to a level pre Covid-19 (final 6 months of 2019) with or without a 2nd wave of infection we could be in for a long road back. Just the 2 east coast centres selling next week with only 16,800 bales on offer. Hopefully a small enough quantity to stop the market’s slide.

 Southern Aurora Fwd Prices            

Micron

Date

Low

21

July 20

1220

Main Buyers (This Week)

1

Endeavour Wool

2361

2

Techwool

2213

3

United Wool

2142

4

Lempriere

1631

5

Tianyu Wool

1253

6

Aust. Merino

1218

Eastern Market Indicators (AUD cents/kg clean)

1171 cents é 12 cents compared with 05/06/2020

Northern Market Indicators (AUD cents/kg clean)

1218 cents é 14 cents compared with 05/06/2020

   AUD/USD Currency Exchange

0.6945 é 0.0004 compared with 05/06/2020

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