Weekly Market Reports


19 February 2021

admin Macwool - Friday, February 19, 2021

 WEEKLY MARKET REPORT

Week Ending 19th February, 2021

 AWEX Northern Micron Indices Comparison

AWEX INDEX

This Week

S34/20

This Week

M34/20

Last Sale

S33/20

Sydney

Change

Last Year

Sydney

Sydney Yearly

Change

17

2145

2144 2125
+20 2082 +63

18

1851

1878

1786

+65

1945

-91

19

1625

1639

1536

+89

1839

-214

20

1402

1419

1340

+62

1813

-411
21 1294n 1318 1223n +71 1798n -504
 26 765n 775 734 (M) +41 (M) 1151n -386

28

515n

536

510n

+5

894n

-379

MC

866n

872n

889n

-23

1105n

-239

MARKET CRACKS 1300! YIPPEE!!

The Chinese New Year celebrations didn’t stop the wool market from advancing this week to break through the 1300 cent mark for the 1st time in almost 12 months. Often around Chinese New Year can be a difficult time to sell wool due to mills being shut down and a sometimes general lack of interest but not the case this year. The AWEX EMI shrugged off the lacklustre 2 sales that saw the market fall 16 cents to record a 43 cent gain to 1318. The rise was just as impressive in US$ terms, a 37 cent jump to break through the 1000 cent mark to 1022 as the FRX was stable for the week at 77.50 cents. The market looks to be performing well in regard to FRX movements. 12 months ago the A$ was 66.50 cents - 16% less than the current level. The fear that medium micron wools (19 and broader) were getting left behind in the market rise were allayed this series as they posted the largest gains, 18s and coarser gained 60 to 85 cents (some better style types were up to 100 cents dearer). Fine fleece types did ascend also but the gains were restricted to 20/30 cents, a nice warm-up for the designated super-fine sale in Sydney next week. Skirting price movements were based purely on VM. All types < 3% VM with good AM results added 35 to 55 cents for the week with all burrier types fully firm. The carding sector continued on from the losses of the past fortnight to average a 17 cent loss over the 3 centres. LKS/CRT, broader than 17.5 micron, fell by 10/20 cents with STN taking the brunt of the losses retreating by 40 to 60 cents. Crossbreds had a mixed sale with combing types solid to 40 cents dearer but burry carding types and XB LMS were punished with some lots receiving only token bids. We passed-in 55% of all our XB LMS offered with talk that the road ahead for XBs could be a long one before there is any sign of improvement.

The EMI is closing in on 12 month highs. Not since March last year has the market been at these levels when the full effects of the pandemic were being realised. The market has risen by 161 cents (14%) since the resumption of sales with the gap between 18 and 21 micron widening. At the opening sale in January it was 444 cents with the gap extending to 569 cents this sale. The old saying was that 18 microns should be 50% higher than 21s (which is now getting close), 1294 to 1851 is a 43% difference. The gap going broader was much the same, 28 micron should always be running at about 50% of what 21s are worth. This is certainly not the case with 21s at 1294 and 28s only at 515 cents again about 40%. As we mentioned earlier the Lunar New Year can adversely affect the wool market. Enquiry from China was reportedly slowing early in the week but very quickly changed to talk of new business being written in China and conversion to forward contracts from India. Exporters commented on how easily the new competition transferred price pressure onto all users as levels rose. Traders dominated the merino combing sectors with topmakers and indent buyers unwilling to be convinced of the longevity of current price levels. Processors and topmakers looked to XBs and cardings for value for money as competition displayed buying patterns pre-pandemic economy methods of operations. Something that has come to light is the delays in shipping wool to China. The ships seem to be getting held up in Singapore and delays of 2 to 4 weeks are common which is holding up wool deliveries to China and tying up critical finance that can be used for future purchases but has not had an adverse effect on the market to date.

        Southern Aurora Fwd Prices            

Micron

Date

Low

21

Apr/May 21

1310

Main Buyers (This Week)

1

Techwool

6659

2

Fox & Lillie

4692

3

Endeavour Wool

3375

4

United Wool

2871

5

Kathaytex Aust.

2553

6

PJ Morris

2515

Eastern Market Indicators (AUD cents/kg clean)

1318 cents é 42 cents compared with 12/02/2021

Northern Market Indicators (AUD cents/kg clean)

1392 cents é 40 cents compared with 12/02/2021

   AUD/USD Currency Exchange

0.7751 é 0.0025 compared with 12/02/2021

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