WEEKLY MARKET REPORT 

Week Ending 18th October, 2019

 AWEX Northern Micron Indices Comparison

MARKET HOPEFULLY HAS FOUND THE LEVEL!

The volatile nature of the market is still well and truly in play as price levels of last sale couldn’t be maintained this week but the degree of fluctuations not as bad (or good) as some over the past 6 weeks. The market opened on a softer note as the 3 centres fell but Fremantle did stage a late recovery on Wednesday. This flowed through to the eastern seaboard on Thursday as minor gains were recorded. By the end of the sale the AWEX EMI fell 26 cents to 1517, < 17.5 were in buyers’ favour while 18s and broader lost 20/40 cents. Skirtings followed a similar pattern to their fleece counterparts to finish the sale 20 cheaper. Cardings were the least affected sector as LKS/STN lost 10 to 20 cents while XBs retreated by 10 to 40 cents.

Trading looks to have returned to somewhat of a normal pattern as the EMI has settled just above 1500 cents - hopefully a bottom level of the market as writing business seems to be easier than a month ago but price movements are still largely driven by supply both for volume and wool types. The acceptance of these prices is widespread as most mills are committed to strategising loss-recovery plans from the hectic financial results caused by the dramatic downturn in price with sentiment at the other end of the wool textile chain still subdued.

Could the global economy be showing signs of recovery?? Now that Brexit is locked in to go ahead without any more hiccups and the US-China trade war not as bullish as the rhetoric may have sounded world economies might have dodged a bullet. Retail sales in China rose by 0.7% in August compared to 12 months ago and their trade surplus increased to US$40 billion in September, up by US$9 billion from September, 2018, putting the yearly trade surplus up to US$300 billion, $80 billion higher than the same period last year. Chinese exports did however drop by 3% but were offset by an import reduction of 8%. Their growth in retail sales is good news for woolgrowers as they buy 75% of our wool of which 45% is sold as woolen products in China, putting them at no1 for the largest consumer of wool in the world.

Next week has 33,000 bales on offer with only enough wool in Sydney for a 1 day sale as some growers hold onto their wool waiting for a dearer market and those who have passed-in wool wait for the market to recover up to that level or better. Going on Thursday’s dearer trend we hope the market can keep moving upwards.

Southern Aurora Fwd Prices         

Main Buyers (This Week)