Weekly Market Reports


21 June 2019

admin Macwool - Friday, June 21, 2019

WEEKLY MARKET REPORT 

Week Ending 21st June, 2019

 AWEX Northern Micron Indices Comparison

AWEX INDEX

This Week

S51/18

This Week

M51/18

Last Sale

S50/18

Sydney

Change

Last Year

Sydney

Sydney Yearly

Change

17.5

2210

2167

2262

-52

2702n

-492

18

2187

2138

2238

-51

2538

-351

19

2090

2099

2144

-54

2374

-284

20

2071

2073

2128n

-57

2356

-285

21

2068n

2068

2120 (M)

-52 (M)

2344 (M)

-276 (M)

28

-

1091

1101 (M)

-10 (M)

1048 (M)

+43 (M)

30

-

885n

914 (M)

-29 (M)

699n (M)

+186 (M)

MC

985

953n

997

-12

1495

-510

FINALLY, IS THIS THE BOTTOM?!!

Just when we thought the wool market couldn’t get any worse it did. The AWEX EMI collapsed by another 57 cents to 1766, eclipsing the low point in early November (EMI at 1776) and now at its cheapest level since March, 2018. All MPGs fell by 45 to 60 cents with even the good spec types not immune from the lack of support for the first time in many weeks. 20% of fleece wool was passed-in on the first day as some lots were up to 100 cents cheaper or completely neglected.

Skirtings suffered the same fate as their fleece cousins, low VM (< 3%) with good L&S results lost 20 to 30 cents while the dusty, burrier types falling by 50 to 80 cents. Cardings continued their losing run as LKS remained unchanged while STN/CRT gave up another 20 to 40 cents. Crossbreds also couldn’t muster any support either as falls ranged from 10 to 30 cents for most types.

Buyer support was almost non-existent on the opening day as the market was almost in freefall despite the smallest weekly offering for exactly 10 years (19,000 bales) and the A$ falling below 69 cents and losing 1% against the Chinese Yuan. A lot of showfloor talk centred around the obvious lack of business and also possible defaults on payments through the processing pipeline - ie letters of credit (LCs) not being honored as financing issues for manufacturers bite as tight cash flow situations are hampering normal business practices. We could be at an attractive price that might see commitment to do business but the ongoing finance troubles and lack of supply to cover too much forward exposure is making mills hesitant to write big volumes of wool.

Most manufacturers sat out of the market as prices descended to what should be favourable levels but retailers are very hesitant to place new orders as consumer demand falls amidst slowing economic growth globally, Brexit uncertainty and the ongoing US/China tariff war restricting confidence. The movement of tops, carbo and yarn to fabric and garments is essential for the predictability of demand through the entire supply chain.

Despite the big opening day’s losses there was a definite change of attitude on the final day as prices steadied and losses were kept to a minimum even with the largest Chinese indent buyer still sitting on the fence and one of the other operators still purchasing but not to their full extent. We thought the bottom was a few weeks ago (1833) but the market has lost 121 cents over the past 3 sales. Hopefully this is it?? Will supply over-rule demand as SA now go into recess till mid August? With 3 sales to go here we are the only source of global supply in the short-term. A few buyers this morning thought that the market might hold at these levels after a bit of inquiry overnight and some business being written. Let’s hope so!!

Free knitted woollen jumpers for poddy lambs. Call into our office and take as many as you need.

Many colours and styles to choose from.

Main Buyers (This Week)

1

Techwool

2167

2

Tianyu Wool

1472

3

United Wool Co.

1465

4

Aust. Merino

1338

5

Michell Aust.

1176

6

Fox & Lillie

1163

Eastern Market Indicators (AUD cents/kg clean)

1766 cents ê 57 cents compared with 14/06/2019

Northern Market Indicators (AUD cents/kg clean)

1789 cents ê 53 cent compared with 14/06/2019

   AUD/USD Currency Exchange

0.6892 ê 0.0020 compared with 14/06/2019

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