Weekly Market Reports


18 December 2020

Friday, December 18, 2020

 WEEKLY MARKET REPORT

Week Ending 18th December, 2020

 AWEX Northern Micron Indices Comparison

AWEX INDEX

This Week

S25/20

This Week

M25/20

Last Sale

S24/20

Sydney

Change

Last Year

Sydney

Sydney Yearly

Change

17

1871

1865 1903
-32 2005 -134

18

1578

1570

1623

-45

1907

-329

19

1390

1392

1442

-52

1818

-428

20

1249

1248

1300

-51

1792

-543
21 1180n 1181 1230n -50 1783n -603
 26 710n 728n 740n -30 1180n -470

28

460n

469

500n

-40

914n

-454

MC

764n

778n

765n

-1

1071n

-307

ANNUS HORRIBILIS BUT … HAVE A MERRY CHRISTMAS!

As the Queen stated at the end of 1992 the year has been “annus horribilis”. The collapse of her 3 children’s marriages and the near total destruction of the much beloved Windsor Castle prompted this statement from her. Fast forward 28 years and the same could be said for 2020 on so many fronts. From devastating bushfires and the continuing drought early in the year and floods that broke the drought and floods now to Covid-19 spreading like wildfire across the globe claiming 1.66 million lives and infecting 75.270 million people on the planet. This year has been like no other in many generations. The wool market continued to be erratic right till the final sale this week. The market gave back nearly all of last series’ gains as the AWEX EMI fell by 41 cents to 1157 the majority of the losses coming in the opening session. The losses in US$ terms was less than half in A$ terms, just 18 cents to 874, this due to the ascending A$ up above 76 cents this morning (a 3 year high against the greenback) a worry for exporters of raw materials. Finer fleece microns < 17.5 fell by 15 to 30 cents with 18s and broader dropping by 45/50 cents. Fine skirtings < 17.5 micron opened cheaper but found solid support in the final session to finish the sale up to 10 cents dearer while the coarser types lost 35 to 55 cents down. There was very little movement in the Carding sector as the MCI lost just 1 cent to 764 with the 3 centres’ MCIs well and truly aligned, 778 to 764. Crossbreds followed the merino combing market to fall 25 to 40 cents for all microns. The passed-in rate blew out to 18%. The big, anticipated offering of 49,000 bales didn’t eventuate with 44,800 being offered (9% withdrawn) combined with the high passed-in rate saw just 36,600 bales sold. One highlight was the highest price in Sydney on our sale day, (3rd highest for this week’s sale and 7th highest in Australia this week) was achieved by one of our Carmichael clients, Carla & Darren Hepburn from Delegate, a 2 bale line of 14.9 micron-0.3VM-72.5yld, 90mm-26nkt made 1898 to be processed by Raymond Industries in India.

The EMI level of 1157 is 401 cents below last Christmas’ price of 1558, back by a whopping 25.7%. The year’s peak was in the opening sale of the year in January when it climbed to 1609 with the low point of just 858 cents in early September, a massive swing of a 47%. The volatility seen over many weeks of this year (in particular these last 6 months) has been unprecedented. The largest weekly drop was 155 cents in late March, 1442 to 1287, followed by a 128 cent fall in the resumption of sales in August. The biggest weekly rise was in October when the EMI climbed by 102 cents to 1219. The sale the previous week before saw a 95 cent leap, 197 cents for the fortnight!! Added to this was the disruption to the main software provider, Talman, in February resulting in the cancellation of Sale 35. All of this combined the challenges that the pandemic brought with it that came very close to having wool sales cancelled in Melbourne and all centres adhering to tight government health regulations with non-essential staff and no clients traveling to wool sales and reps unable to visit shed starts added to the pressure of selling wool in very uncertain times.

The wool market was coming off the “Super-cycle” but was exacerbated by the complete collapse in demand once the pandemic took hold. China is showing signs of recovering but our other major wool users have been much slower. The release of vaccines and more to come will give Northern hemisphere governments the confidence to lift lock-downs and restrictions and a return to normal work and consumer spending habits will help get demand for wool back to a good level. Sales are in recess till week of 11th January. We hope everyone can enjoy a great Christmas and New Year break.

        Southern Aurora Fwd Prices            

Micron

Date

Low

21

Mar/Apr 21

1150

Main Buyers (This Week)

1

Techwool

5227

2

Endeavour Wool

4316

3

Tianyu Wool

4057

4

Modiano

2192

5

United Wool

1911

6

Fox & Lillie

1887

Eastern Market Indicators (AUD cents/kg clean)

1157 cents ê 41 cents compared with 11/12/2020

Northern Market Indicators (AUD cents/kg clean)

1218 cents ê 39 cents compared with 11/12/2020

   AUD/USD Currency Exchange

0.7552 é 0.0109 compared with 11/12/2020

11 December 2020

Friday, December 11, 2020

 WEEKLY MARKET REPORT

Week Ending 11th December, 2020

 AWEX Northern Micron Indices Comparison

AWEX INDEX

This Week

S24/20

This Week

M24/20

Last Sale

S23/20

Sydney

Change

Last Year

Sydney

Sydney Yearly

Change

17

1903

1918 1826
+77 1925 -22

18

1623

1638

1554

+69

1815

-192

19

1442

1454

1382

+60

1723

-281

20

1300

1290

1240

+60

1708

-408
21 1230n 1235 1178n +52 1705n -475
 26 740n 759n 723n +17 1120n -380

28

500n

503

480n

+20

840n

-340

MC

765N

763N

740N

+25

1040N

-375

MARKET RISES 2 DAYS RUNNING!

The penultimate sale of the year finally delivered some good news for growers as the market strung together 2 consecutive days of gains, something it hadn’t done since mid-October. The AWEX EMI climbed by 54 cents (4.7%) to 1198 - its highest point since early November. The rise was more impressive in US$ terms with the market adding 47 cents (5.7%) to 892 as the FRX steadily increased over the week to sit at 74.40 cents (a 1% rise). The market is at its highest point since early March in US$ terms. The market started off on a dearer note following on from the positive sentiment in last sale’s final session. Competitive tension was ramped up on the final day to see prices go higher as all fleece microns added 50 to 75 cents for the week. The market cleared 98.5% of the fleece on offer to have just 75 bales unsold. Skirtings also benefitted from the renewed competition as finer < 18.5 micron and low VM (< 1.5) types lifted by 80 to 100 cents with broader lots gaining 40 to 60 cents. Growers again were happy with the rising market as just 35 bales failed to sell - a 98% clearance rate. Cardings continued their recovery as < 17.5 micron LKS, STN and CRT lifted by 40 to 60 cents with broader types being quoted 20/40 dearer. The collapsing XB market was halted as gains ranged from 20 to 40 cents - a welcome lift after the month long battering they’ve taken. The 37 cent gain for 32 micron equated to a 15% rise!!

This week’s sale was the final opportunity for buyers to buy and, more importantly, ship wool before Christmas. This sense of urgency was evident from the outset and lasted through to the final lot knocked down in Fremantle. Topmakers and traders dominated the buying lists with indent buyers less active. Indents are usually volume based and the lack of normal buying % is indicative of some semblance of price sensitivity being reached. Trader may have met factories’ needs with price surety rather than indenting the next day. The promise of a Covid-19 vaccine has finally arrived with the first vaccinations administered in the UK this week. Russia has been vaccinating for a few weeks but without any medical approval that would stand up in the West. The FDA in the US is set to approve 2 more vaccines anytime now and vaccinations will commence there before Christmas. This will come as a great relief to planet Earth. As lockdowns and social distancing are wound back people will be able to resume work and re-engage with their shopping urge. This will be more than welcome by retailers who have been sweating on consumers getting back into shops and spending money again. What effect will this have on the demand for wool?? An increase hopefully and sooner rather than later. Many buyers have spoken about how much and when the button is pushed for an increase in demand that filters through to greasy wool prices making a comeback. Their opinion of price rises is hundreds of cents apart. Time will tell. Will wool be caught up in the current trade spat between China and Australia?? The advantage we have is that we grow 80% of the world’s merino wool with South Africa, Argentina and Uruguay supplying the rest. The other crucial commodity they need is Iron ore. It also has failed to be mentioned in regards to higher tariffs.

Next week sees the final sale of the year. The national catalogue climbs to 49,000 bales (the largest since early March), up by 10,000 on this week which was the biggest in 8 months. This bigger offering is a result of the lifting market this week and growers wanting to sell before the 3 week Christmas recess. Market might open on a cheaper note but may strengthen on the final day. A good result given the size of the offering and the trades angst to absorb a catalogue well over 40,000 bales.

        Southern Aurora Fwd Prices            

Micron

Date

Low

21

Mar/Apr 21

1200

Main Buyers (This Week)

1

Techwool

5427

2

Endeavour Wool

4213

3

Tianyu Wool

3889

4

Fox & Lillie

2891

5

Aust. Merino

2319

6

Lempriere

1439

Eastern Market Indicators (AUD cents/kg clean)

1198 cents é 54 cents compared with 04/12/2020

Northern Market Indicators (AUD cents/kg clean)

1257 cents é 49 cents compared with 04/12/2020

   AUD/USD Currency Exchange

0.7443 é 0.0063 compared with 04/12/2020

4 December 2020

Friday, December 04, 2020

 WEEKLY MARKET REPORT

Week Ending 4th December, 2020

 AWEX Northern Micron Indices Comparison

AWEX INDEX

This Week

S23/20

This Week

M23/20

Last Sale

S22/20

Sydney

Change

Last Year

Sydney

Sydney Yearly

Change

17

1826

1804 1844
-18 1908 -82

18

1554

1574

1560

-6

1808

-254

19

1382

1373

1377

+5

1706

-324

20

1240

1241

1234

+6

1683

-443
21 1178n 1169 1188n 0 1681n -503
 26 723n - 768n -45 1135n -412

28

480n

484

490n

-10

833n

-353

MC

740n

731n

734n

+6

1061n

-321

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            

Micron

Date

Low

21

Mar/Apr 21

1120

Main Buyers (This Week)

1

Techwool

5371

2

United Wool

3016

3

Endeavour Wool

3006

4

Tianyu Wool

2936

5

Lempriere

2175

6

Aust. Merino

1011

Eastern Market Indicators (AUD cents/kg clean)

1144 cents ê 6 cents compared with 27/11/2020

Northern Market Indicators (AUD cents/kg clean)

1208 cents ê 1 cent compared with 27/11/2020

   AUD/USD Currency Exchange

0.7380 é 0.0023 compared with 27/11/2020