WEEKLY MARKET REPORT Week Ending 13th March, 2020 AWEX Northern Micron Indices Comparison
COVID-19 TAKES HOLD! Ever since the Covid-19 outbreak started everyone in the wool trade had an opinion on the effect, when it would make an impact and how long the aftershock would last. The year, to date, has certainly been eventful with big price swings in the market, an extended Chinese New Year due to the start of Covid-19 and all the associated drama with it and a cyber attack on the trade’s software provider that put a stop to wool sales for 1 week. Through February the market actually improved marginally to everyone’s surprise with most pundits tipping a downturn in demand for textiles and a vast array of consumer goods as people’s spending habits slow to a crawl. Governments across the globe are rolling out spending stimulus packages to try to avert what some economists are already resigned to - a global recession. The AWEX EMI had been trading in a narrow band of 1548 to 1584 last month but showfloor chatter was increasingly becoming negative as all other commodities’ prices have fallen sharply and stock markets around the world have taken their biggest hammering since Black Friday in 1987. The opening day of this weeks wool sale saw heavy losses as merino fleece types were wound back by 40 to 75 cents, less for the better style lots with some types < 65% yield attracting a premium and discounts still increasing for wools below 55% yield. Melbourne did stage a late recovery in the opening session which saw the market just cheaper on the final day. 17 to 18 micron fell by 85 cents for the week while 16.5s and 18.5 and coarser retreated by 40 to 65 cents. Skirtings fell by 50 to 60 cents, while merino cardings gave up 20 to 45 cents from the previous series’ levels. Crossbreds looked to be the only sector to have escaped the big falls of the merino selection with all types bar 25/26 micron (-20) to finish on par. It seems as though Covid-19 is affecting the globe in nearly all aspects of life. A plethora of sporting events and competitions have been delayed or cancelled as well as restricting the public from gathering in large numbers to try and restrict the spread of the virus. The wool market has been relatively untouched up until now but could be swept up in the economic turmoil that has engulfed the world. We must remember that the market is still in a very healthy price range but ill winds are blowing and, given circumstances around the globe, most are predicting a cheapening trend well before any sort of recovery starts which now looks a long way off - well into the second half of the year or beyond. Next sale has 50,000 bales on offer as Melbourne still has some wool to clear from the sale that was cancelled last week. Here’s hoping for some sort of stability. Southern Aurora Fwd Prices
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Main Buyers (This Week)
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