Weekly Market Reports


27 November 2020

admin Macwool - Friday, November 27, 2020

 WEEKLY MARKET REPORT

Week Ending 27th November, 2020

 AWEX Northern Micron Indices Comparison

AWEX INDEX

This Week

S22/20

This Week

M22/20

Last Sale

S21/20

Sydney

Change

Last Year

Sydney

Sydney Yearly

Change

17

1844

1824n 1806
+38 1980 -136

18

1560

1576

1570

-10

1863

-303

19

1377

1378

1386

-9

1744

-367

20

1234

1231

1229

+5

1713

-479
21 1178n 1167 1188n -10 1716n -538
 26 768n 783 798n -30 1168n -400

28

490n

488

559n

-69

855n

-365

MC

734n

746n

704n

+30

1054

-320

OUR RELIANCE ON CHINA GROWS!

This week’s sale played out as the several sales beforehand have done in regards to volumes and withdrawn wool and passed-in rates. The anticipated national catalogue of 41,500 bales never eventuated with 12% (5,000 bales) withdrawn prior to auction and, with a flat market, the passed-in rate dropped to 12% from 19% last series to have just 32,000 bales cleared to the trade - hardly a supply overload. For the 2nd time in the last 3 sales the AWEX EMI was restricted to single figure movements, just a 9 cent fall to 1150. With the strengthening FRX to 73.50 cents the market added 2 cents to its value in US$ terms to 846. It was a tale of 2 markets as merinos were mostly unchanged to dearer while the XB sector fell out of favour to suffer big falls. The fleece market started on a cheaper note but did finish the sale strongly with the inferior style types with poor test results (low yields, tender, high mid-breaks and high CVHs) dragging some MPGs into the red. With a designated super-fine sale in Sydney the superior offering saw 17 micron and finer add 25 to 40 cents and more (60/80) as the style improved while all other microns were 15 cheaper to sellers’ favour. All descriptions of skirtings added 10/20 cents from the previous series while cardings recovered all of last sale’s losses as all types in this sector climbed by 15 to 60 cents, the MCI adding 30 cents to 734. Crossbreds were the disappointing sector of the sale and directly contributed to the EMI losing ground. Finer than 26.5 micron fell by 30/50 cents while the broader types were hammered losing 50 to 80 cents with some individual microns falling by over 15%. Buying interest was from across the board from processors to indent operators and traders. When prices lowered or were filled in the opening session there was a quick buyer replacement that stepped in to maintain good competition and price levels indicating a strong book of orders for now.

Have we come to a new price level?? Taking out last week’s 30 cent fall the market, either side of that has barely moved. For the moment the wild volatility seems to have gone but the past 5 sales (10 auction days) has seen the EMI move 560 cents (up and down) a daily average shift of 56 cents. Over the past 3 weeks though the EMI has moved between 1189 and 1150, a 39 cent movement and taking out 2 days when the EMI was at 1188/1189 the shifts have been restricted to 1150 to 1161, a very tight price range.  What does this mean? Have we reached a price point that the wool pipeline is happy with and can all successfully pass on prices at a profitable level? Or are we in a holding pattern till the next upward shift (fingers crossed) or will  the 2nd wave of the pandemic in Europe and the seemingly out of control status in the US stifle demand  due to lockdowns and falling retail activity just when they are on their knees begging for some sort of global Christmas spending recovery. Or will health authorities give the green light to the 4/5 vaccines that are trialing with 70 to 90% success rate. There are reportedly 10s of millions of doses already produced awaiting approval - some maybe before Christmas. We can only hope.

Our reliance on China as a market this season has grown with them now taking 83% of the clip with the next 3 countries (India, Italy and South Korea) buying 8%. The recent “Singles Day” online shopping extravaganza saw $115 billion of merchandise change hands on just 2 major platforms - Alibaba and JD. Hopefully there is some restocking of retail shelves to happen. The importance of the well-heeled Chinese consumer has never been more important. Their woolen clothing purchases for 2019 of 125mkg is more than the next 3 countries combined, USA, Japan and Germany at 115 mkg. Next week’s offering of 41,800 will not make it to auction unless the market finds a new level.

        Southern Aurora Fwd Prices            

Micron

Date

Low

21

Mar/Apr 21

1120

Main Buyers (This Week)

1

Techwool

4916

2

United Wool

3168

3

Endeavour Wool

3078

4

Fox & Lillie

1896

5

Aust. Merino

1803

6

Tianyu Wool

1659

Eastern Market Indicators (AUD cents/kg clean)

1150 cents ê 9 cent compared with 20/11/2020

Northern Market Indicators (AUD cents/kg clean)

1209 cents ê 5 cents compared with 20/11/2020

   AUD/USD Currency Exchange

0.7357 é 0.0071 compared with 20/11/2020

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