Weekly Market Reports


27 March 2020

Friday, March 27, 2020

 

 WEEKLY MARKET REPORT 

Week Ending 27th March, 2020

 AWEX Northern Micron Indices Comparison

AWEX INDEX

This Week

S39/19

This Week

M39/19

Last Sale

S38/19

Sydney

Change

Last Year

Sydney

Sydney Yearly

Change

17

1883

1868

1848n

+35

2513

-630

18

1754

1763

1715

+39

2437

-683

19

1665

1671

1644

+21

2316

-651

20

1632

1623

1628

+4

2293

-661

21 1609n 1621 1632n -23 2279n -670
26 - 1081n 1095n (M) -14 (M) 1433n (M) -352 (M)

28

871n

868

871n

0

1178n (M)

-310 (M)

30

690n

680

688 (M)

-8 (M)

945 (M)

-265 (M)

MC

987n

1021n

1004n

-17

1142

-155

WOOL SALES STILL ON!!

In the midst of Covid-19 engulfing the globe the wool market managed to keep its head above water as the AWEX EMI ascended by just 4 cents to 1442. In US$ terms the rise was significant (up 53 cents to 854), this due to the upward shift in the FRX to 59 cents - up by 3 cents (6%).  Merino fleece < 20 micron added 5 to 40 cents with 21s and broader falling by 25 cents. Skirtings also tracked upwards by 10 to 20 cents while cardings continued on their slide as the MCI fell below 1000 to 987, off by 17 cents. Crossbreds had a solid sale to finish unchanged. Reports from China say that all provinces bar Hubei (where Covid-19 originated) is back to full production but, due to lockdowns and restricted travel, consumer spending has collapsed by 30% in the past 6 weeks. In news from Italy, after trying to keep mills open for the foreseeable future, the decision was made to close all topmaking plants, woollen mills and spinners and weavers.      

As the world tries to comprehend the magnitude of the effects on everyday life from Covid-19, wool sales will continue. After the government’s announcement earlier in the week that auctions would cease, clarification today from the Dept. of Agriculture announces that livestock and wool sales could continue under the strict social distancing and hygiene practices as they are deemed an essential part of the Agricultural supply chain. Wool sales have moved from the sale rooms in each centre to the showfloors to allow sufficient space between buyers and auctioneers with sales to be restricted to 2 days (Tuesday/Wednesday) leaving Thursday free in case a centre has to cease selling 1 of the other 2 centres can sell their wool to avoid a build up and backlog of quantity. Australia will be the only country to offer wool to the world as South Africa and New Zealand have suspended wool sales for the next 3 weeks. Also released today was new protocol for shearing. (Both these documents in following email for your viewing.)

Many participants in the trade are also exploring other avenues of selling in case wool sales are forced to stop. All avenues of technology that can trade wool on electronic platforms for online selling are being closely monitored and several methods have already undergone trial should the need arise to convert to these methods of selling.

We are still hearing that the market has far more potential to fall than rise and, given the situation in Europe and North America with borders closed and lockdowns of cities and countries in full effect, consumer spending will take massive hits which could result in a wool market losing far more than the 10% we’ve seen to date.

         Southern Aurora Fwd Prices            

Micron

Date

Low

21

May 20

1570

Main Buyers (This Week)

1

Techwool

7463

2

Endeavour Wool

4010

3

Tianyu Wool

3454

4

Fox & Lillie

3367

5

Aust. Merino

2913

6

Kathaytex

2096


Eastern Market Indicators (AUD cents/kg clean)

1442 cents é cents compared with 20/03/2020


Northern Market Indicators (AUD cents/kg clean)

1482 cents é 13 cents compared with 20/03/2020

   

AUD/USD Currency Exchange

0.5920 é 0.0349 compared with 20/03/2020

Please click here for Shearing Operations Protocols


Please click here for Dept. of Agriculture Media Release

20 March 2020

Friday, March 20, 2020

WEEKLY MARKET REPORT 

Week Ending 20th March, 2020

 AWEX Northern Micron Indices Comparison

AWEX INDEX

This Week

S38/19

This Week

M38/19

Last Sale

S37/19

Sydney

Change

Last Year

Sydney

Sydney Yearly

Change

17

1848n

1848

1987

-139

2538

-690

18

1715

1757

1850

-135

2457

-742

19

1644

1662

1768

-124

2331

-689

20

1628

1647

1748

-120

2298

-670

21 1632n 1645 1743n -111 2283n -651
26 1095n 1095n 1123n -28 1408n -313

28

871n

870

875n

-4

1165n

-294

30

-

688

679 (M)

+9 (M)

929 (M)

-241 (M)

MC

1004n

1001n

1054n

-50

1172

-168

MARKET CAUGHT UP IN COMMODITY PLUNGES!

Stability was the last thing on buyers’ minds as the market plunged this week amid the chaos that Covid-19 is creating globally. After last series’ falls the market accelerated the losses this sale as the AWEX EMI collapsed by 83 cents to 1438 - its lowest point since September and 27% cheaper than 12 months ago. The fall was more severe in US$ terms (181 cents to 801, 18% for the week and 43% lower than last year) as the FRX dropped like a stone to 55 cents. All MPGs recorded losses of 100+ cents (110 to 140) with the discounts for the inferior types still becoming larger and larger. Skirtings had a similar scenario peeling off by about 100 cents while merino cardings gave up 30 to 90 cents as the MCI fell by 50 cents 1004. Prices are still at reasonable levels for this sector but, as  an indication of just how high these types have been, the MCI is at a percentile ranking of just 7% for the past 5 years meaning it’s been higher 93% of that time. Crossbreds were the best performing of all sectors as 26s and finer lost 30 cents while all others were either side of firm.

It looks as though the wool market is catching up to other commodities and global stock markets as far as falls are concerned as the world slips into certain recession. The EMI has lost 146 cents over the past 3 sales but still far less than oil, iron ore or stock markets and currencies. Just 2 weeks ago the AU$ against the US$ was 66 cents. Today it’s lifted to 57 from 55 last night. Normally such a dramatic fall in the FRX would convert into business being done and a rush to buy wool at the new favourable FRX - but not now. The big depreciation of the AU$, 13%, has masked the heavy price losses of wool in real terms. Over 70% of wool is traded in foreign currencies all of which have appreciated by 10 to 14%, the wool market falling by 10% over the past 4 sales.

Chinese top-makers and exporters to China dominated the market as European interest was almost non-existent except for the odd specialist superfine order. Schneider reported that their mill in Italy is still in full operation despite the epicentre of the virus that has spread throughout Europe starting in that region of Italy. Despite the falling market Chinese interest remains strong as most factories have returned to normal production. The dearer market in Fremantle yesterday gives hope that the market might be able to level out next week.

Southern Aurora Fwd Prices              

Micron

Date

Low

21

May 20

1570

Main Buyers (This Week)

1

Tianyu Wool

3671

2

Endeavour Wool

3227

3

Techwool

3172

4

Fox & Lillie

2706

5

Aust. Merino

2676

6

Kathaytex

2210


Eastern Market Indicators (AUD cents/kg clean)

1438 cents  83 cents compared with 13/03/2020


Northern Market Indicators (AUD cents/kg clean)

1469 cents  88 cents compared with 13/03/2020

   

AUD/USD Currency Exchange

0.5571  0.0887 compared with 13/03/2020

13 March 2020

Friday, March 13, 2020

WEEKLY MARKET REPORT 

Week Ending 13th March, 2020

 AWEX Northern Micron Indices Comparison

AWEX INDEX

This Week

S37/19

This Week

M37/19

Last Sale

S35/19

Sydney

Change

Last Year

Sydney

Sydney Yearly

Change

17

1987

1994

2072

-85

2560

-573

18

1850

1888

1932

-82

2472

-522

19

1768

1780

1826

-58

2340

-572

20

1748

1753

1803

-55

2309

-561

21 1743n 1736 1783n -40 2291n -548
26 1123n 1138n 1145n -22 1411n -288

28

875n

880

884n

-9

1141 (M)

-261 (M)

30

-

679n

676 (M)

+3 (M)

921 (M)

-142 (M)

MC

1054n

1081n

1090n

-36

1238

-184

COVID-19 TAKES HOLD!

Ever since the Covid-19 outbreak started everyone in the wool trade had an opinion on the effect, when it would make an impact and how long the aftershock would last. The year, to date, has certainly been eventful with big price swings in the market, an extended Chinese New Year due to the start of Covid-19 and all the associated drama with it and a cyber attack on the trade’s software provider that put a stop to wool sales for 1 week. Through February the market actually improved marginally to everyone’s surprise with most pundits tipping a downturn in demand for textiles and a vast array of consumer goods as people’s spending habits slow to a crawl. Governments across the globe are rolling out spending stimulus packages to try to avert what some economists are already resigned to - a global recession.

The AWEX EMI had been trading in a narrow band of 1548 to 1584 last month but showfloor chatter was increasingly becoming negative as all other commodities’ prices have fallen sharply and stock markets around the world have taken their biggest hammering since Black Friday in 1987. The opening day of this weeks wool sale saw heavy losses as merino fleece types were wound back by 40 to 75 cents, less for the better style lots with some types < 65% yield attracting a premium and discounts still increasing for wools below 55% yield. Melbourne did stage a late recovery in the opening session which saw the market just cheaper on the final day. 17 to 18 micron fell by 85 cents for the week while 16.5s and 18.5 and coarser retreated by 40 to 65 cents. Skirtings fell by 50 to 60 cents, while merino cardings gave up 20 to 45 cents from the previous series’ levels. Crossbreds looked to be the only sector to have escaped the big falls of the merino selection with all types bar 25/26 micron (-20) to finish on par.

It seems as though Covid-19 is affecting the globe in nearly all aspects of life.  A plethora of sporting events and competitions have been delayed or cancelled as well as restricting the public from gathering in large numbers to try and restrict the spread of the virus.  The wool market has been relatively untouched up until now but could be swept up in the economic turmoil that has engulfed the world. We must remember that the market is still in a very healthy price range but ill winds are blowing and, given circumstances around the globe, most are predicting a cheapening trend well before any sort of recovery starts which now looks a long way off - well into the second half of the year or beyond. Next sale has 50,000 bales on offer as Melbourne still has some wool to clear from the sale that was cancelled last week. Here’s hoping for some sort of stability.

Southern Aurora Fwd Prices              

Micron

Date

Low

21

April 20

1710

Main Buyers (This Week)

1

Techwool

5174

2

Tianyu Wool

3200

3

Endeavour Wool

3001

4

Fox & Lillie

2619

5

United Wool

2268

6

PJ Morris Wool

2049


Eastern Market Indicators (AUD cents/kg clean)

1521 cents  41 cents compared with 06/03/2020


Northern Market Indicators (AUD cents/kg clean)

1557 cents  48 cents compared with 06/03/2020

   

AUD/USD Currency Exchange

0.6458  0.0164 compared with 06/03/2020

6th March 2020

Friday, March 06, 2020

 WEEKLY MARKET REPORT 

Week Ending 6th March, 2020

 AWEX Northern Micron Indices Comparison

AWEX INDEX

This Week

S36/19

This Week

M36/19

Last Sale

S34/19

Sydney

Change

Last Year

Sydney

Sydney Yearly

Change

17

2072

2058

2082

-10

2608

-536

18

1932

1943

1945

-13

2520

-588

19

1826

1799

1839

-13

2381

-555

20

1803

1782

1813

-10

2340

-537

21 1783n 1766 1798n -15 2321 -538
26 1145n 1153 1151n -6 1451n -306

28

884n

881

894n

-10

1169

-285

30

-

676

675(M)

+1(M)

945(M)

-269(M)

MC

1090n

1108n

1105n

-15

1237

-147

WOOL SALES RESUME ON A SOFTER NOTE

Wool sales recommenced this week as most participants reported that essential components of the software programme were up and running enough to conduct the wool sale. The elevated offering of 69,000 bales didn’t eventuate; the total selection came to 62,000 bales (the largest weekly offering for 12 years) of which 24% was passed-in, most of that in the last session. The opening day actually saw modest increases on the Eastern seaboard but a bit cheaper in Fremantle but, by late on the final day, the extra quantity and big volumes of poorer style types was too much for the trade to absorb as the market tailed off. Losses ranged from 5 to 20 cents for all merino fleece microns with discounts for inferior types becoming larger - another 50 to 100 cents off.

Skirtings followed the merino fleece price direction - dearer for the better types in the opening session only to fall away late on the final day to finish 10 to 30 cents lower. Locks were the only type to lose ground in the carding sector (20 to 30 cents back) while crossbreds withstood most of the negative tone in the merino sector to finish the week 5/10 cents off.

The scenario of pushing 2 weeks of wool sales into one wasn’t ideal but, under the circumstances, the trade was left with no alternative. The higher volume, the quality of the offering and the FRX that favoured the US$ by 1% after it hit its lowest point since the GFC last week was always going to put the market under pressure. It was only early last week before the cyber attack on Talman that showfloor chatter had the market adding to its values but now uncertainty is commonplace as to where the market might be headed as Covid-19 spreads to Europe and other parts of the globe but good news may be coming from China as the number of deaths and reported cases has been on the decrease over the past 48 hours. Global economic growth will be stymied in the March and June quarters as panic on stock markets this week had investors running for cover as the big sell-off came amid fears of a global recession caused by Covid-19 which will curb consumer spending dramatically sending demand for a vast array of goods (including woollen clothing and products) lower. Quantities next week drop to a more manageable 46,000 bales as Melbourne is the only centre to have a bit of a backlog of wool from the last 2 weeks. We hold our breath that financial stress for buyers is over and letters of credit keep flowing in and demand holds. If anyone has any agistment available could they please contact Luke or Don. Despite the widespread rain we still have clients in need of water and are still feeding their stock.

Southern Aurora Fwd Prices              

Micron

Date

Low

21

March 20

1795

Main Buyers (This Week)

1

Techwool

8614

2

Fox & Lillie

5280

3

Endeavour Wool

4531

4

Tianyu Wool

3782

5

Seatech

3563

6

Aust. Merino

2608


Eastern Market Indicators (AUD cents/kg clean)

1562 cents  19 cents compared with 28/02/2020


Northern Market Indicators (AUD cents/kg clean)

1605 cents  13 cents compared with 28/02/2020

   

AUD/USD Currency Exchange

0.6622  0.0029 compared with 28/02/2020