Weekly Market Reports


24 May 2019

admin Macwool - Friday, May 24, 2019

WEEKLY MARKET REPORT 

Week Ending 24th May, 2019

 AWEX Northern Micron Indices Comparison

AWEX INDEX

This Week

S47/18

This Week

M47/18

Last Sale

S46/18

Sydney

Change

Last Year

Sydney

Sydney Yearly

Change

17

2380

2248

2418

-38

2834n

-454

18

2317

2240

2365

-48

2501

-184

19

2163

2146

2231

-68

2261

-98

20

2149n

2144

2189n

-40

2193

-44

21

2129n

2137

2200 (M)

-63 (M)

2189 (M)

-52 (M)

22

-

2131n

2177 (M)

-46 (M)

2185 (M)

-54 (M)

28

-

1071

1180 (M)

-109 (M)

995 (M)

+76 (M)

30

-

888n

981n (M)

-93 (M)

716 (M)

+172 (M)

MC

1019

1036n

1056

-37

1449n

-430

MARKET FALLS SHARPLY BUT BOTTOM IS IN SIGHT!!

Further negative sentiment from buyers saw the market retreat even more as the AWEX EMI lost 60 cents to 1833 and 49 cents in US$ terms to 1261. These indicators are now 150 and 241 cents behind levels from this time last year, 7.5 and 16% lower with the A$ 9% less at 68.7 cents. The major decline in the market was on the opening day as sentiment steadied on the final day. All micron indicators fell sharply, 40 to 80 cents with the familiar pattern of better style, low VM and the odd non-mulesed lot selling at market rate or up to 50 cents clean better with the tender, burrier, low yielding types getting smashed by up to 200 cents.

Skirtings also bore the brunt of poor buyer sentiment as low   VM fine types fell 50 to 70 cents while burrier lots gave up 70/100 cents. Cardings weren’t immune from the falling market either as all types lost 20 to 60 cents. The shine has certainly come off the XB sector after its stellar run since January. 26 to 28 micron lost 100 cents while 30s and < 26 fell 50 cents. This equates to a 219 cent (14%) collapse for 28s over the past 2 sales.

All the problems that led to the market falling last week are still well and truly in place. The lingering trade dispute/tariff war between the US and China is the major factor contributing to the slowdown in the Chinese economy and a sudden dip in their consumer confidence is flowing through mills reluctant to purchase wool as price pressure is mounting from manufacturers and retailers that are struggling to move dearer stock of fabric, garments and yarn that is building up in volume. Costs have also become dearer at early stage processing with scouring costs escalating with more water needed to combat the dustier wools and higher wastage costs incurred.

In response to their economic slowdown the Chinese government has loosened monetary policy ie lowering interest rates on consumer debt (mortgages) and devaluing their currency (Renminbi) against the US$ which has fallen sharply since tariffs were raised to 25% making Chinese exports to the US cheaper.

The EMI has fallen 120 cents (6%) over the past 2 sales. Even with a favourable FRX rate, the A$ at its lowest point since the GFC and weekly offerings under 30,000 bales the market has suffered. Let’s hope the steadier market on Thursday is a signal that we’re at a level where new business has been written and prices ascend!!

Ag Concepts Fwd Prices as at 24 May, 2019

Micron

Date

Low

High

21

28-Aug-19

2130

2130

Main Buyers (This Week)

1

Fox & Lillie

2299

2

Aust. Merino

1804

3

Endeavour Wool

1541

4

United Wool Co.

1265

5

Tianyu Wool

1154

6

Techwool

941


Eastern Market Indicators (AUD cents/kg clean)

1833 cents ê 60 cents compared with 17/05/2019


Northern Market Indicators (AUD cents/kg clean)

1867 cents ê 68 cent compared with 17/05/2019

   

AUD/USD Currency Exchange

0.6877 ê 0.0039 compared with 17/05/2019

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