Weekly Market Reports


15 May 2020

admin Macwool - Friday, May 15, 2020

WEEKLY MARKET REPORT 

Week Ending 15th May, 2020

 AWEX Northern Micron Indices Comparison

AWEX INDEX

This Week

S46/19

This Week

M46/19

Last Sale

S45/19

Sydney

Change

Last Year

Sydney

Sydney Yearly

Change

17

1683

1635

1657

+26

2418

-735

18

1517

1509

1488

+29

2365

-848

19

1391

1398

1353

+38

2231

-840

20

1332

1311

1303

+29

2189n

-857

21 1305n 1276n 1278n +27 2200 (M) -924 (M)
26 770n - 790n -20 1455 -685

28

-

576

596n (M)

-20 (M)

1180 (M)

-604 (M)

30

-

450n

476 (M)

-26 (M)

981 (M)

-531 (M)

MC

795n

814n

796n

-1

1056

-261

1 WEEK WONDER!!

Growers were buoyed by the positive start to this week’s wool sale as prices on the eastern seaboard made a surprisingly about-face with fleece indicators jumping by 25 to 40 cents as business was written for immediate prompt. By Wednesday the market reverted back to the all too familiar pattern, cheaper in Melbourne and Fremantle. The AWEX EMI still did manage a rise for the week breaking a 7 day run of falls, up by 9 cents to 1179 and an 11 cent gain in US$ terms to 764 as the FRX had a stable week trading around 64.75 cents. Skirtings in Sydney followed the fleece lead to gain 20/40 cents while fine LKS lifted by 20 to 30 cents as all other types in the carding sector were unchanged. Crossbreds remain out of favour as losses of 10 to 20 cents were across the spectrum. The pass-in rate dropped to 9%, the highest clearance rate (91%) since December.

While always welcome, the rise in the market looks to be short-lived. A smattering of business was written and a positive outcome for growers in this sale but global demand has not shifted to the positive. In fact it could even fall lower as the full effects of a global recession are yet to fully impact consumers till the 2nd half of the year.

Buyers and overseas mills are reporting prices are at very competitive levels but the key component in selling any commodity is demand which is virtually running on empty so shifting unsold stock is nearly impossible. Even though spinners, weavers and retailers are coming back on line globally trying to process and on-sell tops and yarn that is 200 to 400 cents too dear is proving mission impossible and many still have greasy wool on docks still to hit the scour that were bought at prices deemed too high or, in some cases, orders have been cancelled on this wool. Many companies along the pipeline are facing financial pressure with no cash reserves set aside. Some are using this as an excuse to renegotiate expensive contracts or cancel them altogether. A vertical-integrated company in India has been rumoured to have cancelled hundreds of tonnes of greasy wool contracts. Until all this wool makes its way through the pipeline to retailers and demand picks up, prices paid to woolgrowers will continue to fall or, best case scenario, flat-line given quantities don’t exceed current volumes.

The key to consumer demand getting back to pre Covid-19 level will be the easing of lockdown restrictions and how fast people can resume work and start to spend their disposable income again. Measures are in place in many countries to get people back to work and spending money to speed up the economic recovery as soon as possible.        

 Southern Aurora Fwd Prices            

Micron

Date

Low

21

July 20

1275

Main Buyers (This Week)

1

Techwool

3008

2

Tianyu Wool

2557

3

Endeavour Wool

2505

4

PJ Morris

1788

5

United Wool

1720

6

Aust. Merino

1501

Eastern Market Indicators (AUD cents/kg clean)

1179 cents é 9 cents compared with 08/05/2020

Northern Market Indicators (AUD cents/kg clean)

1230 cents é 16 cents compared with 08/05/2020

AUD/USD Currency Exchange

0.6476 é 0.0044 compared with 08/05/2020

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