WEEKLY MARKET REPORT

Week Ending 4th December, 2020

 AWEX Northern Micron Indices Comparison

A VACCINE APPROVED!!

Once again the wool market followed a similar pattern of previous sales, volatile but on a much smaller scale. The market is looking for some defined direction but is unsure of which way to move. The big price swings that we saw in October and November have shrunk to minimal movements with the AWEX EMI down to single figure adjustments over the past 2 sales. The EMI lost 6 cents this week to finish at 1144 and, in US$ terms, the fall was identical to the gain of the previous sale (2 cents to 844). The FRX has risen over the course of the week to now sit above 74 cents. The market opened on a cheaper note but did firm up in the final session to have 19 micron fleece and broader in sellers’ favour with 17.5 to 19 5/10 cheaper and < 17 giving back some of last sale’s gains to fall 15 cents coming off the designated superfine sale, this buying strategy almost standard procedure. Skirtings sold to a similar pattern to the fleece but did finish the sale fully firm to 10 cents dearer. Cardings had a very solid sale with all types quoted as firm/unchanged except low VM (< 2%) LKS finer than 17.5 that were 30 to 40 cents higher. The crossbred sector continued to get cheaper as finer than 27 micron fell by 30 to 40 cents with the broader types unchanged. This sector of the market has fallen quite rapidly over the past 3 weeks with 26s making around 400 cents, 28s about low to mid 300s and a 30 micron fleece lot only mid 200s (based on 70% yield, < 2% VM). Crossbreds again made up the bulk of passed-in lots as the overall number was similar to last sale at 10%.

Buyers were reporting business enquiry and conversion to new orders was down a fraction on the week before thus the softer market on the opening day. It only took this slight price adjustment down to a level where exporters were more comfortable to be able to turn enquiry into sales. As a result most types were dearer and all buyers reported the final quotes that were sent to clients and mills were in fact higher than prices at the start of the sale but, with the averaging of individual lots not based on time period, the MPGs and indicators were not reflective of the closing levels. Purchases were evenly spread between processors, traders and indent operators.

As has been the case for several sales the anticipated national volume didn’t go close to what was finally offered. A look at the last 6 weeks of sales has an average of 12% of the initial offering withdrawn before sale. This, coupled with the passed-in rate that is averaging 15%, doesn’t leave a massive amount of wool that is actually sold to the trade.

The big news of the week has to be the emergency approval of a vaccine in the UK. The whole planet had been waiting for the past few months to see when and where the first approval would be. Vaccines will be rolled out as early as next week to the most critical in need, frontline medical workers and the elderly. This should be followed by the approval of 2/3 more vaccines before Christmas and vaccination programs to start in earnest early in the new year. This should have an immediate positive effect on the global economy as lockdowns and restrictions are wound back and people can go back to some form of normality pre Covid. As we can see in Australia the economy rebounded by a record level in the September quarter compared to the horror June quarter and the price of airline tickets and accommodation has trebled in the past 2 weeks as state lockdowns were eased. Hopefully this good news will see a genuine lift in global consumer spending in the new year on all goods including woolen clothing and products. According to all the good judges on the showfloor the market should be stable next week.

        Southern Aurora Fwd Prices            

Main Buyers (This Week)