Weekly Market Reports


13th August, 2021

admin Macwool - Friday, August 13, 2021

 WEEKLY MARKET REPORT

Week Ending 13th August, 2021

 AWEX Northern Micron Indices Comparison

AWEX INDEX

This Week

S06/21

This Week

M06/21

Last Sale

S02/21

Sydney

Change

Last Year

Sydney

Sydney Yearly

Change

17

2454

2378 2538
-84 1478 +976

18

2039

2020

2129

-90

1272

+767

19

1698

1704

1768

-70

1126

+572

20

1377

1403

1438

-61

1083

+294
21 1303n 1293 1342 -39 1081n +222
 26 780n 773n - - 765n +15

28

500n

489n

530n

-30

520n

-20

MC

903n

938n

948n

-45

716n

+187

OUCH!! A PAINFUL START TO SALES.

It was a bad resumption to wool sales after the 3 week winter recess. Most participants were hopeful of a solid market even with forecasts predicting 57,000 bales 2 weeks ago. Last Friday, this fell to 53,000 bales and with the FRX in our favour by over 1.5 cents the market was looking to be just in buyers’ favour when auctions commenced. Up until one of China’s main buyers suddenly withdrew from the market only minutes before selling started. This resulted in the market almost “free-falling” on Tuesday with losses ranging from 130 cents for 16.5s in Melbourne to 40 cents for 21s. The market looked to steady a bit on Wednesday with a few finer microns losing 10 to 20 cents and all others 5 to 10. Hopes were up for a leveling market in Fremantle which concluded up to 20 cents dearer. Melbourne finished the sale in isolation on Thursday with < 17.5 losing more ground and coarser microns slightly up. The AWEX EMI lost 56 cents to 1372 and fell to 1010 in US$ terms (a 55 cent loss). By the numbers, finer than 19 micron fell by 70 to 90 cents with broader wools 40 to 60 cheaper. Again, it was the finer microns that took the brunt of the losses in the skirtings as < 18 micron lost 70 to 100 cents with > 19 reduced by 30 to 50 cents. Cardings lost anywhere from 30 to 100 cents depending on type as the 3 MCIs lost an average of 45 cents - all still sit above 900 cents (903 to 938). The crossbred sector was the least affected as opening session falls of 20 to 30 cents was the only movement for the sale. The pass-in rate skyrocketed to 33%.

So why the big fall?? The absence of one of China’s largest processors for the whole sale and the quieter buying patterns of 2 other major buyers was a main reason, while the annual discussion over big quantities after a recess still rages. One solution to avoid a large catalogue after a recess is to shorten the break to 2 weeks but getting buyers/brokers to agree on this is akin to saying Covid-19 is not spreading!! Chinese demand was poor at best but India, Italy and the Czech Republic seemed to maintain their pre recess buying patterns albeit at lower prices. Covid worries (Delta strain spreading rapidly) could have a dampening effect on demand from China in the short term. The ability to move greasy wool further down the processing pipeline has suddenly (over the recess) become a big hurdle to jump as some exporters are still experiencing financial constraints despite many “letters of credit” being opened during the break. The shipping and supply chain delays that have been a major problem and still pose some difficulties could be exasperated as a dock worker has tested positive to Covid-19 causing the closure of a major container terminal. The (1.35 billion US$) state-of-the-art Ningbo container terminal is located 100km south of Shanghai and was the 3rd busiest container port in the world last year.

Quantities have reduced sharply to 41,000 bales next week but may not be enough to halt the markets slide. We are hope they’re wrong!!


Southern Aurora Fwd Prices

Micron

Date

Low

21

Nov. 21

1310

Main Buyers (This Week)

1

Techwool Trading

5527

2

Endeavour Wool

2603

3

Australian Merino

2466

4

Fox & Lillie

2298

5

Modiano Aust.

2213

6

PJ Morris Wool

1919


Eastern Market Indicators (AUD cents/kg clean)

1372 cents ê 56 cents compared with 14/07/2021

Northern Market Indicators (AUD cents/kg clean)

1463 cents ê 59 cents compared with 14/07/2021

   AUD/USD Currency Exchange

0.7463 ê 0.0099 compared with 14/07/2021

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