Weekly Market Reports


29 May 2020

Friday, May 29, 2020

 WEEKLY MARKET REPORT 

Week Ending 29th May, 2020

 AWEX Northern Micron Indices Comparison

AWEX INDEX

This Week

S48/19

This Week

M48/19

Last Sale

S47/19

Sydney

Change

Last Year

Sydney

Sydney Yearly

Change

17

1653

1620

1625

+28

2409

-756

18

1498

1495

1473

+25

2361

-863

19

1363

1373

1339

+24

2211

-848

20

1296

1305

1278

+18

2203

-904

21 1275n 1299 1255n +20 2127 -922

28

600n

596

576 (M)

+20 (M)

1123 (M)

-527 (M)

30

-

459n

450 (M)

+9 (M)

935 (M)

-476 (M)

MC

843n

872n

823n

+20

1036

-193

LIGHT AT THE END OF THE TUNNEL??

Buyer sentiment moved to the positive this week as all sectors of the market posted gains. The AWEX EMI crept 15 cents higher to 1170. The appreciation of the FRX by 1 cent to 66.5 saw the market increase by 21 cents to 777 in US$ terms. The price increases were very even across the merino microns. 18 to 30 cents covered most types with some of the best lots commanding higher premiums as just 4% of the fleece offering was passed-in in Sydney. Finer skirtings < 17.5 micron also gained 20/30 cents with broader types unchanged. Cardings continued to add to last series’ gains by posting a 20 cent rise in the MCI, all types were 20 to 50 cents higher. Crossbreds also looked 15 to 20 cents better.

Could the market finally reach the bottom? May saw the EMI have 2 positive and 2 negative weeks to trade between 1179 and 1155 just a 24 cent movement. A solid month when compared to the wild fluctuations of January, March and April with February also having very little price shift (13 cents - 1581 to 1568). The news from China keeps improving as their industrial economy had a strong bounce back in April after facing the first 3 months of the year experiencing their first economic quarterly contraction in history. Retail and investment figures are still weak but did improve from March to April. Year-on-year retail sales were 7.5% lower for April 2020 to April last year, a vast lift from the March figures of 16% lower this year compared to 2019. Consumer spending should improve by July/August north of the Equator as apparel producers have started to look at cloth samples again and purchasing managers are enquiring on prices at these levels - a good sign for the busier Autumn/Winter period in the northern hemisphere. Retailers could be faced with a dilemma of trying to shift out-of-date/fashion expensive stock at a loss to make way for new colours, designs and styles that will be hitting retailers for their busiest time of the year.

National offerings have averaged 22,300 bales since Easter and, with just a few new and unfilled orders in the market over the last month, with limited quantity available prices can react quickly at this end of the pipeline but buyers are still reporting hesitation at the other end to book up large volumes. Demand is the key ingredient to ensuring a farm-gate price rise and that will not happen till tens of millions of people around the globe return to work and are able to start spending their disposable income again.

Drop into our Dubbo office or Macrural at Brewarrina to pick up free woollen jumpers to keep your poddy lambs warm this winter.

      All colours and sizes for both male and female lambs!

 Southern Aurora Fwd Prices            

Micron

Date

Low

21

July 20

1275

Main Buyers (This Week)

1

Techwool

2594

2

Endeavour Wool

2285

3

Fox & Lillie

1275

4

Aust. Merino

1154

5

PJ Morris

1122

6

Lempriere

1018

Eastern Market Indicators (AUD cents/kg clean)

1170 cents é 15 cents compared with 22/05/2020

Northern Market Indicators (AUD cents/kg clean)

1212 cents é 19 cents compared with 22/05/2020

AUD/USD Currency Exchange

0.6641 é 0.0092 compared with 22/05/2020

22 May 2020

Friday, May 22, 2020

 WEEKLY MARKET REPORT 

Week Ending 22nd May, 2020

 AWEX Northern Micron Indices Comparison

AWEX INDEX

This Week

S47/19

This Week

M47/19

Last Sale

S46/19

Sydney

Change

Last Year

Sydney

Sydney Yearly

Change

17

1625

1601

1683

-58

2380

-755

18

1473

1467

1517

-44

2317

-844

19

1339

1354

1391

-52

2163

-824

20

1278

1296

1332

-54

2149n

-871

21 1255n 1284 1305n -50 2129n -874

28

580n

576

576 (M)

0 (M)

1071 (M)

-495 (M)

30

-

450n

450 (M)

0 (M)

888 (M)

-438 (M)

MC

823n

856n

795n

+28

1019

-196

MARKET REVERTS TO ‘BAD OLD DAYS’!!

Was the one week wonder just that? Looking at the market report from Melbourne on Tuesday one could be forgiven that the falling market was behind us as the 20+ cent rise in >19.5s and cardings was the start of a recovery. On the other side of the continent, however, hopes were dashed as Fremantle’s market fell by 23 cents and, as Sydney joined in on Wednesday, both eastern seaboard centres fell to debunk the myth of a market that had bottomed out. By week’s end the AWEX EMI gave up another 24 cents to 1155 completely wiping out last series’ gains. In US$ terms the descending trend was offset by the rise in the FRX of 1.25% which would’ve contributed to the falling market - just a 7cent decline to 756. Merino fleece indicators fell 45 to 65 cents while skirtings had similar losses of 30 to 50 cents. Cardings bucked the cheaper trend as all types in this sector were quoted 20/40 dearer, the MCI up by 28 cents TO 823 while XBs were in buyers’ favour.

It was a very different IWTO Congress that was held this week. Scheduled to be held in China then rescheduled to Belgium it was moved to a digital platform due to the ongoing travel restrictions. One session of interest was the Market Intelligence session in which several speakers reported. Chris Wilcox from the Nat Council of Wool Selling Brokers spoke of the awful economic conditions and low consumer confidence around the globe and that all sectors of the wool pipeline from early stage processors to garment and interior textile manufacturers had seen a massive drop in  production since the new year and a sharp rise in stock levels except garment making and the recovery in raw wool demand in the near term is very limited. Madam Peng Yanli from the China Wool Textile Association also painted a very grim picture. Production of wool fabric and yarn fell by 25% in the first 3 months of 2020 in China due to domestic and global collapse in demand. This led to the value of their wool textile and garment exports to fall more sharply in the 1st quarter of the year than during the GFC in 2008. This led to a large number of their mills capacity utilisation fall below 50% but a significant number are returning  to 80% capacity as domestic demand recovers and conditions improve slowly in the textile industry but there are still many challenges ahead as cancelled retail orders offshore and tight restraints on working capital will slow the recovery. A full video of all speakers can be seen on the IWTO’s Facebook page or their YouTube channel at www.youtube.com/user/IWTOCHANNEL/featured.

Drop into our Dubbo office or Macrural at Brewarrina to pick up free woollen jumpers to keep your poddy lambs warm this winter.

      All colours and sizes for both male and female lambs!

 Southern Aurora Fwd Prices            

Micron

Date

Low

21

July 20

1275

Main Buyers (This Week)

1

Tianyu Wool

2943

2

Techwool

2295

3

Fox & Lillie

1296

4

Endeavour Wool

1237

5

United Wool

968

6

Michell Aust.

893

Eastern Market Indicators (AUD cents/kg clean)

1155 cents ê 24 cents compared with 15/05/2020

Northern Market Indicators (AUD cents/kg clean)

1193 cents ê 37 cents compared with 15/05/2020

AUD/USD Currency Exchange

0.6549 é 0.0073 compared with 15/05/2020

15 May 2020

Friday, May 15, 2020

WEEKLY MARKET REPORT 

Week Ending 15th May, 2020

 AWEX Northern Micron Indices Comparison

AWEX INDEX

This Week

S46/19

This Week

M46/19

Last Sale

S45/19

Sydney

Change

Last Year

Sydney

Sydney Yearly

Change

17

1683

1635

1657

+26

2418

-735

18

1517

1509

1488

+29

2365

-848

19

1391

1398

1353

+38

2231

-840

20

1332

1311

1303

+29

2189n

-857

21 1305n 1276n 1278n +27 2200 (M) -924 (M)
26 770n - 790n -20 1455 -685

28

-

576

596n (M)

-20 (M)

1180 (M)

-604 (M)

30

-

450n

476 (M)

-26 (M)

981 (M)

-531 (M)

MC

795n

814n

796n

-1

1056

-261

1 WEEK WONDER!!

Growers were buoyed by the positive start to this week’s wool sale as prices on the eastern seaboard made a surprisingly about-face with fleece indicators jumping by 25 to 40 cents as business was written for immediate prompt. By Wednesday the market reverted back to the all too familiar pattern, cheaper in Melbourne and Fremantle. The AWEX EMI still did manage a rise for the week breaking a 7 day run of falls, up by 9 cents to 1179 and an 11 cent gain in US$ terms to 764 as the FRX had a stable week trading around 64.75 cents. Skirtings in Sydney followed the fleece lead to gain 20/40 cents while fine LKS lifted by 20 to 30 cents as all other types in the carding sector were unchanged. Crossbreds remain out of favour as losses of 10 to 20 cents were across the spectrum. The pass-in rate dropped to 9%, the highest clearance rate (91%) since December.

While always welcome, the rise in the market looks to be short-lived. A smattering of business was written and a positive outcome for growers in this sale but global demand has not shifted to the positive. In fact it could even fall lower as the full effects of a global recession are yet to fully impact consumers till the 2nd half of the year.

Buyers and overseas mills are reporting prices are at very competitive levels but the key component in selling any commodity is demand which is virtually running on empty so shifting unsold stock is nearly impossible. Even though spinners, weavers and retailers are coming back on line globally trying to process and on-sell tops and yarn that is 200 to 400 cents too dear is proving mission impossible and many still have greasy wool on docks still to hit the scour that were bought at prices deemed too high or, in some cases, orders have been cancelled on this wool. Many companies along the pipeline are facing financial pressure with no cash reserves set aside. Some are using this as an excuse to renegotiate expensive contracts or cancel them altogether. A vertical-integrated company in India has been rumoured to have cancelled hundreds of tonnes of greasy wool contracts. Until all this wool makes its way through the pipeline to retailers and demand picks up, prices paid to woolgrowers will continue to fall or, best case scenario, flat-line given quantities don’t exceed current volumes.

The key to consumer demand getting back to pre Covid-19 level will be the easing of lockdown restrictions and how fast people can resume work and start to spend their disposable income again. Measures are in place in many countries to get people back to work and spending money to speed up the economic recovery as soon as possible.        

 Southern Aurora Fwd Prices            

Micron

Date

Low

21

July 20

1275

Main Buyers (This Week)

1

Techwool

3008

2

Tianyu Wool

2557

3

Endeavour Wool

2505

4

PJ Morris

1788

5

United Wool

1720

6

Aust. Merino

1501

Eastern Market Indicators (AUD cents/kg clean)

1179 cents é 9 cents compared with 08/05/2020

Northern Market Indicators (AUD cents/kg clean)

1230 cents é 16 cents compared with 08/05/2020

AUD/USD Currency Exchange

0.6476 é 0.0044 compared with 08/05/2020

8 May 2020

Friday, May 08, 2020

 WEEKLY MARKET REPORT 

Week Ending 8th May, 2020

 AWEX Northern Micron Indices Comparison

AWEX INDEX

This Week

S45/19

This Week

M45/19

Last Sale

S44/19

Sydney

Change

Last Year

Sydney

Sydney Yearly

Change

17

1657

1631

1697

-40

2480

-823

18

1488

1469

1518

-30

2413

-925

19

1353

1353

1414

-61

2288

-935

20

1303

1299

1362n

-59

2273n

-970

21 1278n 1286 1362 -84 2259n -981
26 790n 846n 835n -45 1523 (M) -677 (M)

28

611n

596

661n

-50

1323 (M)

-727 (M)

30

-

476

478 (M)

-2 (M)

1005n (M)

-529 (M)

MC

796n

812n

840n

-44

1093

-297

IS THE LOW POINT IN SIGHT?

Another poor week for the wool market as the pattern was similar to previous sales with demand almost non-existent as the market recorded more heavy losses across the board. It wasn’t that long ago that buyers were talking of weekly volumes of 35,000 bales being sustainable in the current environment. The absolute lack of demand has meant that, over the past 5 sales, the national catalogue has only averaged 24,000 bales but this has been unsustainable as the market has lost 117 cents, most of that (102 cents) over the last 2 sales. With passed-in lots and growers withdrawing wool the amount of wool cleared to the trade has only been about 20,000 bales/week. The AWEX EMI slumped by another 55 cents to 1170 this week - its lowest point since 2015. The fall in US$ terms was similar - a 48 cent decline to 753, a 10 year low, this despite the FRX falling by a cent to 64.35. Merino fleece types gave up 20 to 65 cents while skirtings fell by 30 to 50 cents across the entire range. Cardings fell by another 20 to 70 cents as the MCI descended by an additional 44 cents to 796 and crossbreds gave up 40 to 50 cents. Surprisingly the passed-in rate fell to 18% down from 25% last sale as more growers seem prepared to meet the market rather than risk a lower price later on.

How low can the market go?? No-one truly knows the answer and opinions are divided. Are we at the bottom? If not, at what level is the low point? And how long will the recovery take for the market to get back to an acceptable level where all participants along the pipeline can make money. Two major buyers we spoke to had varied opinions, from the market perhaps bottoming out sooner rather than later to the market progressively getting cheaper well into our winter months. One buyer thought the only way to help global economies kick start were stimulus packages but this would place all countries in more financial stress - a risk some will not take. The level of consumer confidence in  all major wool consuming countries (US, Europe, Japan and South Korea) has literally fallen off a cliff in April due to the social lockdowns and restrictions that have lead to a collapse in discretionary consumer spending. Only China’s figures showed a very small decline in February before a slight improvement in March, unbelievable!! The world is in a recession and, as to when industry and economies can be running to full capacity and unemployment rates fall as lockdown restrictions ease, then will we see consumers willing to spend their hard earned money again and economic growth rebound to levels we saw pre Covid-19. The wool market absolutely depends on consumer’s ability to spend their excess cash on our product.

         Southern Aurora Fwd Prices            

Micron

Date

Low

21

July 20

1250

Main Buyers (This Week)

1

Techwool

2784

2

Tianyu Wool

2020

3

United Wool

1816

4

Endeavour Wool

1626

5

PJ Morris

1576

6

Fox & Lillie

1519

Eastern Market Indicators (AUD cents/kg clean)

1170 cents ê 55 cents compared with 01/05/2020

Northern Market Indicators (AUD cents/kg clean)

1214 cents ê 45 cents compared with 01/05/2020

AUD/USD Currency Exchange

0.6432 ê 0.0102 compared with 01/05/2020

1 May 2020

Friday, May 01, 2020

 WEEKLY MARKET REPORT 

Week Ending 1st May, 2020

 AWEX Northern Micron Indices Comparison

AWEX INDEX

This Week

S44/19

This Week

M44/19

Last Sale

S43/19

Sydney

Change

Last Year

Sydney

Sydney Yearly

Change

17

1697

1695

1749n

-52

2493

-796

18

1518

1519

1593

-75

2425

-907

19

1414

1437

1483

-69

2304

-890

20

1362n

1382

1443

-81

2278

-916

21 - 1370 1459n (M) -89 (M) 2260 (M) -890 (M)
26 835n 861n 865 (M) -4 (M) 1515n -680

28

661n

668

674n

-13

1303n

-642

30

-

478n

484 (M)

-6 (M)

1005n (M)

-527 (M)

MC

840n

843n

865n

-25

1094

-254

AT LEAST IT’S RAINED!!

The market suffered further losses this week as sentiment seems to go from bad to worse. The AWEX EMI gave up another 47 cents to 1225 ( a 5 year low) but just 2 cents in US$ terms to 800 as the FRX appreciated to 65.40 cents (up by 2.25 cents - 3.5%) almost the identical amount the market fell by - 3.7%. Unfortunately the losses aren’t attributed to just the FRX movements.  Virtually no sector was immune from the rapidly declining demand causing all fleece microns to fall by 50 to 90 cents as discounts widened for the dustier types but the better types (and some NM lots) sold to solid competition or even dearer rates. Skirtings fell by 20 to 50 cents while cardings retreated by 10 to 30 cents and crossbreds lost 10 to 40 cents depending on micron. 32 micron is at 270c clean, its lowest point for 23 years. This weeks losses caps off 2 disastrous months for the wool market. April saw the EMI fall by 76 cents (4.7%). This was minor compared to March - a collapse of 294 cents, 11.8%. Looking back to earlier in the year the price shifts were minor as January lost just 10 cents while in February the EMI gained 33 cents, certainly an erratic shift.

The fall in the market and the spread of Covid-19 that has whole countries in lockdown has seen retail spending collapse cannot be underestimated. March figures coming out of the USA saw retail spending slump by 8.7% compared to February, manufacturing output was back by 6.3% and industrial production shrunk by 5.4%, the largest fall since WWII. Buyers were adamant that even with restricted demand national catalogues of 35,000/week would be able to be absorbed. The average weekly offering has been 36,000 over the past 8 sales and just 24,000 in April but this has been a bridge too far. Most of the recent falls came in a period when New Zealand and South Africa had suspended wool sales but now both are back online - SA holding a sale via “Zoom” last week and back into the Port Elizabeth sale rooms from now and NZ selling, scouring and shipping wool again. Even though some form of normality is returning to China as shopping centres reopen, large retail outlets are reporting business is 20% below normal throughput before the shutdown as early stage processing in China is continuing but temporary closures for most combing mills are still in force in Europe, Malaysia and South America. Further down the chain a gradual lift in restrictions is giving some middle and end stage processors in Europe a gradual cranking up of machinery. Many astute judges believe the wool market still has some way to fall while others think that we are close to the bottom as the more production comes online, prices will rise in time but not till late 2020 (even into 2021). Talk about an each way bet!! At least it’s rained again!!

         Southern Aurora Fwd Prices            

Micron

Date

Low

21

June 20

1330

Main Buyers (This Week)

1

Techwool

2803

2

Endeavour Wool

1686

3

Tianyu Wool

1660

4

United Wool

1315

5

Seatech Ind.

1101

6

Aust. Merino

999

Eastern Market Indicators (AUD cents/kg clean)

1225 cents ê 47 cents compared with 24/04/2020

Northern Market Indicators (AUD cents/kg clean)

1259 cents ê 48 cents compared with 24/04/2020

AUD/USD Currency Exchange

0.6534 é 0.0226 compared with 24/04/2020