Weekly Market Reports


6 September 2019

admin Macwool - Friday, September 06, 2019

WEEKLY MARKET REPORT 

Week Ending 6th September, 2019

 AWEX Northern Micron Indices Comparison

AWEX INDEX

This Week

S10/19

This Week

M10/19

Last Sale

S09/19

Sydney

Change

Last Year

Sydney

Sydney Yearly

Change

17

1842

1823

1845

-3

2989

-1147

18

1783

1747

1795

-12

2669

-886

19

1578

1582

1593

-15

2443

-865

20

1497

1481

1515

-18

2324

-837

21 1487n 1477 1499n -12 2285 -798
26 1100n - - - 1486n -386

28

853n

849

843n

+10

968

-115

30

-

703

698n (M)

+5 (M)

739 (M)

-36 (M)

MC

814n

821n

806n

+8

1563

-749

IS THIS THE BOTTOM??

This week’s market started off poorly but rebounded in the final session to give a glimmer of hope that the market may have finally bottomed out. By week’s end the AWEX EMI lost just 10 cents to 1365 with a slight lift in US$ terms (6 cents) to 931. All MPGs fell ranging from 5 to 20 cents with the very odd best style Italian lot fetching 30 to 60 cents higher than their indicators. The renewed buyer interest flowed through to Room 2 as skirtings lifted by 30/50 cents, cardings added 30 to 60 cents and XBs looked up to 10 cents dearer.

Finally the market came off the descending elevator to find the stairs. After a horror August which saw the market shed 379 cents (23.8%), the largest monthly % decline in 28 years, the market recorded its first daily rise since Sale 2 on Thursday to hopefully stop the rot. The EMI is a massive 723 cents (34.6%) lower than a year ago, meaning just 10% was lost in the period from August 2018 till end of July. The “super-cycle” that most analysts talk about is certainly over. This is the 5th such cycle since the market’s big jump in 1988. Reasons for the downturns in the market after theses super-cycles are varied and all not related to the wool market, rather global external factors. If we look at the 4 downturns this century: 2003 to 2005 with the SARS outbreak in China the EMI fell 608 cents (49%) to a low of 632; the GFC period of 2008/09 saw a 328 cent drop to 721 (31%); from 2011 to 2012 a 35% (501 cents) fall to 933 was due to the massive cotton stockpile that China had built up after the GFC; and, of course, this current downturn which hopefully is nearing its end.

Now we are faced with new global challenges that will take time (up to 2 years according to some economic experts) to sort out from Brexit to the US/China trade wars which took a new twist this week. As of Monday the US lifted tariffs by 10% on a vast range of imports from China (worth $300B) from 20% to 30% but for woolen clothing the tariff was raised by 15%. Have prices “overshot” their high and low points?? Many believe so and the fundamentals of supply and demand get lost in the over-correction when the market goes in either direction. Many traders believe the market reached an unsustainable height last year and this current correction has gone too far. Hopefully the market can maintain the level it finished at on Thursday.

Ag Concepts Fwd Prices as at 30 August, 2019       

Micron

Date

Low

High

21

16-Oct-19

1500

1500

21

20-Nov-19

1500

1500

Free knitted woollen jumpers for poddy lambs. Call into our office in Dubbo or Macdonald Rural at Brewarrina and take as many as you need. Many colours and styles to choose from!

Main Buyers (This Week)

1

Techwool

2778

2

Fox & Lillie

2152

3

Endeavour Wool

2118

4

Tianyu Wool

1778

5

G Schneider

1077

6

PJ Morris

1044

Eastern Market Indicators (AUD cents/kg clean)

1365 cents ê 10 cents compared with 30/08/2019

Northern Market Indicators (AUD cents/kg clean)

1408 cents é 3 cents compared with 30/08/2019

   AUD/USD Currency Exchange

0.6819 é 0.0090 compared with 30/08/2019

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