WEEKLY MARKET REPORT 

Week Ending 20th March, 2020

 AWEX Northern Micron Indices Comparison

MARKET CAUGHT UP IN COMMODITY PLUNGES!

Stability was the last thing on buyers’ minds as the market plunged this week amid the chaos that Covid-19 is creating globally. After last series’ falls the market accelerated the losses this sale as the AWEX EMI collapsed by 83 cents to 1438 - its lowest point since September and 27% cheaper than 12 months ago. The fall was more severe in US$ terms (181 cents to 801, 18% for the week and 43% lower than last year) as the FRX dropped like a stone to 55 cents. All MPGs recorded losses of 100+ cents (110 to 140) with the discounts for the inferior types still becoming larger and larger. Skirtings had a similar scenario peeling off by about 100 cents while merino cardings gave up 30 to 90 cents as the MCI fell by 50 cents 1004. Prices are still at reasonable levels for this sector but, as  an indication of just how high these types have been, the MCI is at a percentile ranking of just 7% for the past 5 years meaning it’s been higher 93% of that time. Crossbreds were the best performing of all sectors as 26s and finer lost 30 cents while all others were either side of firm.

It looks as though the wool market is catching up to other commodities and global stock markets as far as falls are concerned as the world slips into certain recession. The EMI has lost 146 cents over the past 3 sales but still far less than oil, iron ore or stock markets and currencies. Just 2 weeks ago the AU$ against the US$ was 66 cents. Today it’s lifted to 57 from 55 last night. Normally such a dramatic fall in the FRX would convert into business being done and a rush to buy wool at the new favourable FRX - but not now. The big depreciation of the AU$, 13%, has masked the heavy price losses of wool in real terms. Over 70% of wool is traded in foreign currencies all of which have appreciated by 10 to 14%, the wool market falling by 10% over the past 4 sales.

Chinese top-makers and exporters to China dominated the market as European interest was almost non-existent except for the odd specialist superfine order. Schneider reported that their mill in Italy is still in full operation despite the epicentre of the virus that has spread throughout Europe starting in that region of Italy. Despite the falling market Chinese interest remains strong as most factories have returned to normal production. The dearer market in Fremantle yesterday gives hope that the market might be able to level out next week.

Southern Aurora Fwd Prices              

Main Buyers (This Week)