Weekly Market Reports


31 January 2020

admin Macwool - Friday, January 31, 2020

 WEEKLY MARKET REPORT 

Week Ending 31st January, 2020

 AWEX Northern Micron Indices Comparison

AWEX INDEX

This Week

S31/19

This Week

M31/19

Last Sale

S30/19

Sydney

Change

Last Year

Sydney

Sydney Yearly

Change

17

2038

2004

2082

-44

2538

-500

18

1893

1892

1917

-24

2437

-544

19

1795

1791

1809

-14

2304

-509

20

1753

1767

1778

-25

2273

-520

21 1731n 1757 1766 -35 2249n -518
26 1081n 1108n 1111n -30 1343n -262

28

803n

804

838n

-35

1024n

-199

30

-

649

690 (M)

-41 (M)

848 (M)

-199 (M)

MC

1114n

1136n

1145n

-31

1165

-51

WHERE TO NOW? WHO KNOWS??

The wild volatility continued this sale just as the market has done since the New Year’s resumption and indeed a pattern that started last August. Sure there are always outside factors that can influence the market but we seem to be in a perfect storm of new causes that is sending the market on the roller-coaster ride we are on at the moment. The Coronavirus and extension of the Chinese New Year till the 8th February and a liquidity problem due to banks in China on holidays has hindered normal buying patterns as everyone second guesses what the market might do and virtually no-one has been able to make a firm prediction. There will be a definite effect on the global economy as economic growth slows and consumer confidence will worsen before it improves. 

The market opened, as all expected, with heavy losses across all microns as the opening day’s 56 cent loss for the AWEX EMI was the largest daily fall since August. The market staged a recovery in the final session - exactly half the losses (28 cents) clawed back. By week’s end the EMI had lost 28 cents to 1548, 38 cents in US$ terms to 1043. Losses ranged from 45 to 25 cents for all microns bar 19/19.5 that retreated by only 5 to 15 cents. The better style spec types were, in some cases, sold with virtually no discounts but, at the other end of the scale, the average and inferior style types (MF6 & MF7) were up to 200 cents cheaper than the previous sale. Skirtings suffered heavier losses, 70 to 90 cents for 17 micron and finer, 90 to 120 cents for all others and up to 140 cents for poorer style lots. Cardings couldn’t maintain the gains of the 2 previous sales as falls of 20 to 40 cents covered all wool in this sector. Crossbreds also fell out of favour as 26 to 32 micron fell 30 to 40 cents.

Global stock markets reacted quickly to the growing concern of the Coronavirus but did recover most of the losses later in the week. The domestic travel restrictions in China and their extended Lunar New Year celebrations have hampered some mills’ operations that rely on itinerant workers that have gone back to their home provinces and are unable to return to work. Orders were virtually non-existent on the first day but order was restored in the final session as sanity prevailed as FRX against the US$ fell by 1.25 to 1.86% giving manufacturers buying in US$ a cheaper buy rate thus pushing the market higher in the final session. Also helping was the high pass-in rate (37%) on the first day and 13% (5920 bales) withdrawn for the week.

A pleasing aspect was the dominance of the world’s largest top-maker from Europe for Merino types with traders very active and indent buyers from China making their presence felt in the final session. So where to from here is anyone’s guess. To predict a price movement direction would be a brave move but hopefully the recovering market is a sign of things to come as national quantities should be around 40,000 bales per week for the next month.

Southern Aurora Fwd Prices              

Micron

Date

Low

21

March 20

1770

Main Buyers (This Week)

1

Techwool

3470

2

Fox & Lillie

2442

3

Modiano Aust.

1993

4

Endeavour Wool

1574

5

United Wool

1551

6

Michell Wool

1483


Eastern Market Indicators (AUD cents/kg clean)

1548 cents ê 28 cents compared with 24/01/2020


Northern Market Indicators (AUD cents/kg clean)

1578 cents ê 39 cents compared with 24/01/2020

   

AUD/USD Currency Exchange

0.6739 ê 0.0124  compared with 24/01/2020

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