Weekly Market Reports


7 February 2020

admin Macwool - Friday, February 07, 2020

WEEKLY MARKET REPORT 

Week Ending 7th February, 2020

 AWEX Northern Micron Indices Comparison

AWEX INDEX

This Week

S32/19

This Week

M32/19

Last Sale

S31/19

Sydney

Change

Last Year

Sydney

Sydney Yearly

Change

17

2080

2078

2038

+42

2578

-498

18

1943

1922

1893

+50

2483

-540

19

1834

1825

1795

+39

2317

-474

20

1800

1796

1753

+47

2290

-490

21 1789n 1793 1731n +58 2260n -471
26 1091n 1104n 1081n +10 1353n -262

28

819n

821

803n

+16

1045n

-226

30

-

663

649 (M)

+14 (M)

888 (M)

-225 (M)

MC

1118n

1157n

1114n

+4

1159

-41

BUYERS STARE DOWN CORONAVIRUS

The expected falls due to uncertainty over the Coronavirus issue this week didn’t materialise as buyers led by Chinese interests continued unabated. Despite what seems to be an escalating problem with the virus combined with the extension of the Chinese New Year to keep people at home, the start of sales on Wednesday’s market was on firm footings and gathered more momentum on the second day of sales.

There were several industry huddles late last week among trade bodies who discussed options from suspending sales to continuing as normal and maybe with some support from brokers to extend payment terms to allow cash strapped buyers to continue operating. The lockdown in China has meant that no-one is at work to process invoices hence buyers here in Australia are carrying the cost of delayed terms. With $43.35m sold this week it won’t take long to chew up available finance resources, so the extension of payment by even a week allows breathing space until things sort themselves out. Macwool was one of the first brokers to extend payment and free storage to 14 days, which was well received by buyers and, as the week progressed, a further six or seven brokers followed suit.

The positive tone was not universal however as the micron indices show above. Whilst the low vm, better style wools all showed healthy gains this wasn’t the case for the large quantity of low yielding, sub 50% fleece types which struggled to maintain values. There is about 23% of the catalogue not purchased by China but these low yielding, drought effected wools are certainly reliant on Chinese competition, hence our willingness to extend payment terms on behalf of growers to maintain their support.

We have advised buyers we will offer this extension for four selling weeks then review the situation.

In regards to the market, momentum built as the sale progressed to peak as the last lots were sold in each centre. The AWEX EMI added 29 cents to 1577 and 22 cents in US$ to 1065. All microns posted gains of 30 to 60 cents with the larger volume of superior style, finer types in this designated superfine sale in Sydney, where premiums were 150 to 200 cents higher but, as mentioned above, the lots yielding below 50% looked 200/250 cents off the pace. The situation was better for merino skirtings, < 17 micron jumped by 50 to 70 cents with all others 20/30 higher. Cardings were also positive finishing in sellers’ favour. Crossbreds also benefitted from the renewed competition to add up to 20 cents to their previous sale’s prices. Next week has 43,000 bales on offer. Hopefully the people we need to be back at work in China are allowed to work and some form of normality can be restored there. It’s been a crazy few weeks!!

Southern Aurora Fwd Prices              

Micron

Date

Low

21

March 20

1800

Main Buyers (This Week)

1

Techwool

4199

2

Tianyu Wool

3113

3

Modiano Aust.

2416

4

Endeavour Wool

1999

5

Fox & Lillie

1647

6

Michell Wool

1554


Eastern Market Indicators (AUD cents/kg clean)

1577 cents é 29 cents compared with 31/01/2020


Northern Market Indicators (AUD cents/kg clean)

1612 cents é 34 cents compared with 31/01/2020

   

AUD/USD Currency Exchange

0.6759 é 0.0014 compared with 31/01/2020

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