Weekly Market Reports


26 January 2018

admin Macwool - Thursday, January 25, 2018

WEEKLY MARKET REPORT

Week Ending 26th January, 2018

 AWEX Northern Micron Indices Comparison

AWEX INDEX

This Week

S30/17

This Week

M30/17

Last Sale

S29/17

Sydney

Change

Last Year

Sydney

Sydney Yearly

Change

17

2684

2663

2672

+12

2004

+680

18

2345

2275

2374

-29

1907

+438

19 

2101

2085

2137

-36

1735

+366

20

1900

1893

1942

-42

1537

+363

21

1785

1765

1786

-1

1432

+353

22

1723n

1697

1709n

+14

1378n

+345

26

1046

1065

1128

-82

919n

+127

28

735

738

808

-73

661

+74

30

550

560

594

-44

554

-4

MC

1334n

1271n

1513n

-179

1160

+174

CARDINGS & CROSSBREDS HIT THE WALL

Our worst fears were realised this week as sectors of the market came off historical highs in an historical fashion. Not since 1997 has the carding market retreated so swiftly where locks, in particular, ended the day up to 250 cents cheaper yesterday. No one was prepared for the extent of the fall, buyers included. Our sources told us that a drop of 30 - 40 cents clean over the week was expected and factored in but, as the week progressed and buyers’ credit facilities expired, the market had only one way to go. Pass-in rates for cardings and crossbreds ranged between 20% and 33% across the three centres with brokers’ pre sale valuations suddenly looking grossly optimistic.

Merino fleece wools, particularly well measured lots, held their ground fairly well as did the lower VM pieces and bellies.

High VM and high mid break lines came under increasing pressure on Thursday and poorly prepared clips, particularly XB wools, received little buyer interest and were noticeably cheaper.

The run up to Chinese New Year typically sees a slow down in shipping and a softening market that is usually felt a few weeks out. The concern now is that this pull back has happened a week or two early as Chinese New Year isn’t until Feb 16-23. Chinese orders began to slow last week and it was felt that a moderate fall would have seen orders move again and the market would have stabilised. Now we have a situation where they may well sit on the fence and see how much further the market can fall, particularly with merino cardings which were so historically high.

It’s a tough decision to make now whether we are better sitting it out or sell into a falling market. Our sources tell us that with oddments there is plenty of room for downside movement and we would be better off having these wools sold.

Overall though, the merino market outlook is still very positive and good types should hold reasonably well and could improve after Chinese New Year. A slightly different story for the XB sector as these wools haven’t performed well for quite some time now and this week’s falls made that situation worse. It may be some time before these types gather any real momentum, particularly the coarser end.

To put all this in perspective the 36,430 bales sold this week averaged $2014 a bale so it’s not all doom and gloom. Next week a similar offering of 42,244 bales will be offered with Macwool on day one with 989 bales.

Main Buyers (This Week)

1

Techwool

4603

2

Tianyu Wool

3670

3

Seatech Ind.

2741

4

Fox & Lillie

2704

5

Aust. Merino

2357

6

Kathaytex (Vic)

2332

7

Lempriere

1963

8

PJ Morris

1813

9

Kathaytex (Aust)

1012

Eastern Market Indicators (AUD cents/kg clean)

1744 cents ê 57 cents compared with 19/01/2018

Northern Market Indicators (AUD cents/kg clean)

1845 cents ê 56 cents compared with 19/01/2018

 AUD/USD Currency Exchange
0.8028 é 0.0064 compared with 19/01/2018

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