WEEKLY MARKET REPORT

Week Ending 12^th September, 2014

AWEX Northern Micron Indices Comparison

THIS LOOKS TO BE THE LEVEL

Not quite the result we had hoped for at this week’s wool sales as prices couldn’t maintain last sale’s levels. The fall was marginal, - 3 cents (0.3%) to have the AWEX EMI at 1022. In US cent terms the fall was larger, 18 cents to 940, this due to the currency’s downward shift to 90 cents (the lowest in 9 months), a fall of 3 cents in a week. This could create some business as the chance to book up wool while the exchange rate is more favourable may prove too good an opportunity to let slip as an upward shift would cost exporters and Chinese mills money and cut margins.

The market falls were disappointing but small. 18.5 to 21s gave up 7 to 13 cents as did 16.5 to 17 slipping 7 cents. Some stylish types in 17.5 to 18 micron range saw these record marginal movements either way. Despite the negative tone, super-fine microns and best top-maker and spinner styles performed well. Some best top-making FNF lots in our catalogue with nkt readings over 40 and extremely high mid-breaks of over 90 made up to 40 to 100 cents above their indicators. On the flip side, however, tender lots with high mid-breaks saw their discounts increase sharply, commonly 60 to 100 behind the indicator prices. Prem shorn types continue to shine as one lot measuring just 58mm was only 35 cents from a full length type.

Skirtings looked to escape the hiccup that the fleece room experienced as subtle rises were recorded on both days. By week’s end most types and descriptions, regardless of VM, were quoted 10 to 20 cents better. Two growers in this week’s sale from Orange and Yeoval would testify to the great prices for these types as their “BKN” sold within 75 to 120 cents of their respective indicators -17.5 to 19 micron- similar prices and, in some cases, better than low-spec fleece types. Their BLS performed just as well coming within 90 to 100 of the 19 and 19.5 indicators, a great result that lifts clip averages! Cardings had a solid sale with little or no change on the Eastern Seaboard as Fremantle added 12 cents to its MCI, now at 781 cents, leaving all 3 centres within 10 cents of each other. Crossbreds had a mixed sale as Sydney’s selection rose up to 5 cents while Melbourne gave up similar amounts.

This weekend sees the 26^th Nanjing Wool Market Conference being held in China. As far as the Chinese are concerned, this is their main gathering to nut out industry issues, look at future developments as well as new market opportunities and cement current relationships. Participants include all sectors of the trade from growers to spinners and weavers and manufacturers. This year’s theme is ENJOY LIFE, ENJOY WOOL. Wool buyers see this as a great chance to do business face-to-face at (hopefully) current market rates as well as feeling the pulse of processes and how demand is shaping up for the next 6-12 months. One exporter reported that plenty of business is being written, around the present market rates but, with a cautious overtone, he sees the short term outlook (till Christmas) as flat with the odd spike like last week short lived - a week or two here and there depending on shipping deadlines and currency movements.

National quantities grow to 46,000 bales next week (the biggest since mid February) as Melbourne holds a 3 day sale - their first for some time. The catalogue in the north grows from just 8,000 this week (the smallest in 4 months) to 11,000. Not much change is expected in prices but the lower exchange rate might help.

Main Buyers (This Week)