Weekly Market Reports


14 August 2020

admin Macwool - Friday, August 14, 2020

WEEKLY MARKET REPORT

Week Ending 14th August 2020

 AWEX Northern Micron Indices Comparison

AWEX INDEX

This Week

S07/20

This Week

M07/20

Last Sale

S06/20

Sydney

Change

Last Year

Sydney

Sydney Yearly

Change

17

1499

1484

1478

+21

2000

-501

18

1284

1275

1272

+12

1932

-648

19

1143

1141

1126

+17

1766

-623

20

1100

1093

1083

+17

1711

-611

21 1086n 1079 1081n +5 1695n -609
 26 - 788 784n (M) +4 (M) 1150n -

28

523n

525

520n

+3

835n

-312

30

-

454

421 (M)

+23 (M)

659n (M)

-205 (M)

MC

651n

651n

716n

-65

993

-342

CAN EMI STAY ABOVE 1,000??

All participants held their collective breaths this week as any downward shift in prices across the board would see the AWEX EMI fall below the 1000 cent mark - a demoralising stat that no-one, especially growers, would not want to eventuate. Thankfully this didn’t happen as slight movements both sides of a solid market had the EMI tract lower by just 2 cents to 1004. The market seemed to split into 2 directions as merino fleece wools edged higher over the course of the series to add 5 to 25 cents to their previous values. Growers seemed to accept the renewed interest from exporters as 95% of fleece types were sold. The twist in the tail came in Room 2 as skirtings < 18 micron finished in sellers’ favour by 10 cents while broader types slipped by 20 to 40 cents. Cardings was the sector that took the biggest hit as CRT/STN gave up another 20 to 60 cents while LKS tumbled by 60 to 100 cents with the carbonising types in this sector struggling to find any level of support post 1st stage manufacturing. The 3 MCIs fell by an average of 72 cents to now range between 651 on the Eastern seaboard to 669 in Fremantle. This seismic downward shift in Cardings caused the EMI to fall rather than stay unchanged or rise slightly. Crossbred’s movements were minimal as most types were up to 10 cents cheaper.

The supply and demand ratio looked about right this series as the 30,300 bales on offer were much more manageable than the previous sale’s volume. National quantities around this figure look about right relative to current demand as just 8% of the offering was passed-in. Local exporters led the consolidation on the opening day as overseas processors were caught off guard but then played catch-up in the final session to push merino combing types dearer. Some Chinese topmakers have moved some quantity to Merino skirtings with European activity concentrating on the Crossbred sector as Modiano again secured 1/3 of this sector. The EMI is now at its lowest point since August 2014 with some wools at 5 to 10 year lows. These cheaper types being used as machinery fodder to keep mills running could be an astute move in the long term as cheaper tops will be on offer when demand down the processing pipeline picks up. Fleece wools must also look attractive at these low levels especially in US$ terms - 21 micron fleece converts to 770 cents, 19s are about 815 and a 17 micron fleece type will cost about 1070 cents on today’s market, cost certainly not the prohibitive factor. After the opening sale in January these same microns were at 1315 (21s), 1350 (19s) and 1440 for 17 micron in US$ terms, even these prices not outrageous for downstream users to make money.

Can the market sustain a level above 1000 cents?? If harsher Covid-19 lockdowns come back in force in the northern hemisphere we may see the EMI collapse even further. Many good judges thought 1000 would be the low point - they may unfortunately be proved wrong. Melbourne’s sale may be held via Zoom next week and extended to 3 days due to Covid-19 restrictions.

Southern Aurora Fwd Prices            

Micron

Date

Low

21

Oct/Nov 20

1075

Main Buyers (This Week)

1

Endeavour Wool

2984

2

Techwool

2962

3

Lempriere

2929

4

Aust. Merino

2316

5

Tianyu Wool

2207

6

Modiano

1954

Eastern Market Indicators (AUD cents/kg clean)

1004 cents ê 2 cents compared with 07/08/2020

Northern Market Indicators (AUD cents/kg clean)

1046 cents é 2 cents compared with 07/08/2020

   AUD/USD Currency Exchange

0.7123 ê 0.0066 compared with 07/08/2020

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