Weekly Market Reports


24 April 2020

admin Macwool - Friday, April 24, 2020

 WEEKLY MARKET REPORT 

Week Ending 24th April, 2020

 AWEX Northern Micron Indices Comparison

AWEX INDEX

This Week

S43/19

This Week

M43/19

Last Sale

S42/19

Sydney

Change

Last Year

Sydney

Sydney Yearly

Change

17

1749n

1734

1748

+1

2483

-734

18

1593

1568

1593

0

2404

-811

19

1483

1486

1513

-30

2291

-808

20

1443

1468

1493

-50

2264n

-821

21 1438n 1459 1477 (M) -18 (M) 2238 (M) -779 (M)
26 - 865n 899n (M) -34 (M) 1501n (M) -636 (M)

28

674n

673

703n

-29

1244

-570

30

-

484

483 (M)

+1 (M)

976 (M)

-492 (M)

MC

865n

861n

886n

-21

1084

-219

NO REAL CHANGE!

The national offering increased to 25,000 bales this week but price improvements looked even further away as the AWEX EMI gave up another 20 cents to 1272. The fall was similar in US$ terms (26 cents to 802) as the FRX ascended by 1 cent to 63 cents. Broader Merino fleece wools, some Crossbreds and cardings were the main instigators for the fall in the EMI. Fine fleece types < 18.5 finished either side of firm while 19 and broader retreated by 30 to 50 cents, more for the poorer style lots. Skirtings had a solid sale while crossbreds finer than 28 micron lost 15 to 35 cents with broader types unchanged and cardings fell by 10/20 cents.

The smaller weekly offerings that will only average 25,000 to 30,000 bales for the foreseeable future are unlikely to help the market in the short term. Sydney’s total of 4696 bales this week was the smallest weekly offering for 23 years.  The yearly offering is 11% lower (153,000 bales) than last season. The fall in the market year on year has been spectacular. The EMI is 671 cents lower than this week 12 months ago (1943 to 1272), a 34% fall. As the table above shows all fleece microns are 750 to 800 cents behind last year’s levels. The comparison is worse in US$ terms, 1398 to 802, a 595 cent reduction or 42%. The FRX is 12% behind, 63 cents to 72.

Demand is the key to every commodity and, as we’ve seen in the news this week, oil producers were paying refineries to take their oil as storage capacity overflowed while prices fell into negative territory for the first time ever as production outstripped demand by 2 to 1, global airline travel is almost nonexistent and peak hour traffic in every major city is a thing of the past as travel restrictions mean very little fuel is being used (the only exception is on farm) despite prices at the bowser now at 20 year lows. Wool exports of raw wool was 10% lower from the 5 major exporting countries (NZ, SA, Australia, Uruguay and Argentina) this season to February, this due to the ongoing drought here in Australia, demand falling from August and the start of restrictions due to Covid-19. The figures for March/April will be worse.  Looking at the countries that process wool, China imported 11% less than the same period to February; Italy was 19% lower; and the Czech Republic 16% back; but India had a 5% improvement. These figures are guaranteed to get worse as March/April retail numbers come in because retail spending (bar food and liquor) keep falling globally.

Next week has a similar volume on offer but no magic bullet in sight. Despite the rapid decline of the market lately 21s are still trading at 83% of their value since 1995 - just 17% of that time spent over 1500 cents in 2011,2015 and most of the recent period since 2017.

         Southern Aurora Fwd Prices            

Micron

Date

Low

21

June 20

1430

Main Buyers (This Week)

1

Techwool

3035

2

Tianyu Wool

2052

3

United Wool

1987

4

Aust. Merino

1982

5

Endeavour Wool

1569

6

PJ Morris

1265

Eastern Market Indicators (AUD cents/kg clean)

1272 cents ê 20 cents compared with 17/04/2020

Northern Market Indicators (AUD cents/kg clean)

1307 cents ê 18 cents compared with 17/04/2020

AUD/USD Currency Exchange

0.6308 é 0.0101 compared with 17/04/2020

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