WEEKLY MARKET REPORT 

Week Ending 6th December, 2019

 AWEX Northern Micron Indices Comparison

MARKET FALLS UNDER 1500 cents!!

Another tough week for the wool market as the downward trend continued on for the 3^rd sale in a row. Steady falls all week saw the AWEX EMI peel off by 38 cents to fall below the 1500 cent mark to 1492 - its lowest point in 13 weeks, 357 cents lower than this sale last year. In US$ terms the loss was only 15 cents to 1020 somewhat cushioned by the strengthening FRX to 68.5 cents. This ascendency, along with the subdued demand, contributes to the falling market. Losses were most severe in the finer microns, < 18.5 giving up 50 to 70 cents while 19s and broader fell by 30/40 cents with the better style, good spec types less affected while the dustier/tender lots saw the discounts widen on these. Skirtings also took a hammering with all types falling by 50 to 80 cents. The only highlight was the Carding sector which added 7 cents to 1061 while crossbreds lost 20 to 30 cents.

A wane in demand, the logistical headache of shipping wool over the Christmas/New Year period, the timing of the Chinese New Year (25^th January) and a sudden spike in offerings for the last 2 sales of the year are all conspiring to send the market on a downward spiral - 100 cents fall over the past 6 weeks. The large offerings and inability of buyers to deliver wool on time is severely hampering normal buying and shipping activities. This week was, in effect, the final opportunity to ship wool to China for arrival before their New Year shutdown so the large offering at this time is bad timing for exporters and mills. This means a 2 to 4 week additional financing period that is required for exporters for any wool destined for China that is bought over the next 2 sales if delivery is not “prompt”, one week for shipment delay due to Christmas and up to 2 weeks for the Chinese New Year shutdown. The margins are tight at the best of times let alone this situation when hand to mouth modus operandi that all the trade use.

AWTA released their November figures which saw a 1% fall when compared to the same month last year with the progressive total for the year running at 8.5% less wool tested than last season (127.5mkg to 139.4mkg) and 77,175 (10.5%) less bales offered than last season. Next week’s sale (48,500) could be the largest since end of April growing by 9,000 bales (23%) since last Friday, Melbourne’s catalogue ballooning by a massive 27%.

Southern Aurora Fwd Prices              

Main Buyers (This Week)