Weekly Market Reports


14 February 2020

admin Macwool - Friday, February 14, 2020

WEEKLY MARKET REPORT 

Week Ending 14th February, 2020

 AWEX Northern Micron Indices Comparison

AWEX INDEX

This Week

S33/19

This Week

M33/19

Last Sale

S32/19

Sydney

Change

Last Year

Sydney

Sydney Yearly

Change

17

2063n

2048

2080

-17

2587

-524

18

1928

1947

1943

-15

2490

-562

19

1833

1830

1834

-1

2342

-509

20

1800

1779

1800

+3

2306

-503

21 - 1773 1793(M) -20(M) 2281n(M) -508(M)
26 1121n 1160n 1091n +30 1368n -247

28

-

866

821(M)

+45(M)

1103(M)

-237(M)

30

-

678n

663(M)

-15(M)

928(M)

-250(M)

MC

1108n

1128n

1118n

-10

1183

-75

MARKET JUST HANGS IN

As expected, Coronavirus and its impact in China are still dominating the news and the flow-on effects for the global economy. It’s a given that economic growth will slow around the world but by how much and for what length of time is impossible to pinpoint, anywhere from 0.5 to 1.5% less growth forecast. The general consensus is this will last for the next 2 quarters at least. The economic slowdown in China is already taking effect as travel restrictions and a slow return to work for most of the population, is massively impacting consumer spending from food to electronics and clothing. The only factories allowed to resume operations thus far are those producing commodities that prevent the contagion, about 10%. It’s hoped another 30% of factories will start work this Monday and most others on 24th February. In regards to wool, port logistics in China are saying there should only be a one week delay for wool to reach its final destination, but this could stretch out to 2/3 weeks depending on availability of containers going back to China. The Chinese government is making an all-out effort to quell the spread of the virus. The big cities have set up screening stations at their entry points and airports and railway stations, with factories not allowed to have any workers on site from quarantined provinces. Many workers if possible are working from home.

The market’s reaction was minimal this week as the AWEX EMI lost just 9 cents to 1568 and 11 cents to 1054 in US$ terms. Fine merino fleece microns <18.5 lost 15 to 40 cents due mainly to a style adjustment from the superfine selection offered in the previous series. 19s and broader were in sellers favour. Skirtings had a worse sale than their fleece counter-parts giving up 40 to 60 cents while all types in the carding sector bar LKS fell by 20 to 30 cents. Crossbreds were the only shining light as increases ranged from 15 to 35 cents.

Europe was again the dominant buyer as China deals with the Coronavirus and many mills still not back into full production. The large capital expenditure of the major buyers has surprisingly been maintained over the past 3 weeks. If shipments are significantly delayed, the cash reserves of buyers will be tested in the short term. Another problem will be sourcing containers to fill with wool on ships returning to China. The lack of ships and containers arriving from China has dramatically fallen over the past 3 weeks which means the quick turnaround for their imports and our exports back to China has gone as has the “backload discount” the shipping companies offered to ensure full containers on the return leg. This now could be a thing of the past as a shortage of container space could escalate shipping prices. Market direction next week is any-ones guess.

Southern Aurora Fwd Prices              

Micron

Date

Low

21

March 20

1800

Main Buyers (This Week)

1

Techwool

5630

2

Fox & Lillie

3658

3

Endeavour Wool

2871

4

Modiano

2831

5

Michell Wool

1682

6

United Wool

1397


Eastern Market Indicators (AUD cents/kg clean)

1568 cents  9 cents compared with 07/02/2020


Northern Market Indicators (AUD cents/kg clean)

1604 cents  8 cents compared with 07/02/2020

   

AUD/USD Currency Exchange

0.6723  0.0030 compared with 07/02/2020

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