Weekly Market Reports


20th August, 2021

Friday, August 20, 2021

 WEEKLY MARKET REPORT

Week Ending 20th August, 2021

 AWEX Northern Micron Indices Comparison

AWEX INDEX

This Week

S07/21

This Week

M07/21

Last Sale

S06/21

Sydney

Change

Last Year

Sydney

Sydney Yearly

Change

17

2394

2354n 2454
-60 1499 +895

18

2006

1967

2039

-33

1284

+722

19

1654

1655

1698

-44

1143

+511

20

1352

1358

1377

-25

1100

+252
21 1253n 1240 1303n -50 1086n +167
 26 - 765n 780n - 788n (M) -23 (M)

28

480n

478

500n

-20

523n

-43

MC

880n

910n

903n

-23

651n

+229

A COVID-19 CRASH? NOT LIKELY!!

After last week’s big fall and high withdrawal figures for this series, hopes were high that the reduced volume would be a catalyst to steady the market. This sale was at one point rostered for 46,000 bales, then fell to 38,000 on Monday. By weeks’ end only 34,400 bales were offered with 28% passed-in and 15% withdrawn meaning only 24,600 bales actually sold to the trade. Fremantle held its sale over just 1 day as only 4000 bales were on offer - 58% passed-in and 7% were withdrawn to have only 1,700 bales sold. This being the lowest weekly “sold” figure of any selling centre since AWEX records began in 1997. Tuesday’s market opened on a much cheaper note to follow on from last sales' poor performance but signaled some hope as it showed some resilience to level out on Wednesday. Again, 25 to 60 cent losses were across the board for all merino fleece microns. Skirtings fared just as badly as their fleece counterparts with losses ranging from 40 to 70 cents. Cardings also suffered heavy losses with all types in this sector giving back another 20 to 50 cents bar < 18.5 micron LKS which finished just in buyers’ favour.  For the 2nd sale in a row the crossbred sector looked to be the least affected with falls confined to 10 to 20 cents. The EMI fell by another 37 cents to 1335 - that’s 93 cents for the 2 sales since selling resumed. In US$ terms the 41 cent fall saw the indicator drop below 1000 cents to 970 as the 1 cent fall to 72.60 in the FRX wasn’t enough to stop the market falling. The A$ is well below 72 cents today - a 9 month low.

The enticement of cheaper prices at the end of last week failed to draw any new business from any of the major mills in China which resulted in the ongoing price reduction on the opening day. The ongoing container terminal closure in China and the latest Covid-19 reduced demand hiccup conspired to keep confidence low in the initial session with some smatterings of business stabilising the market on Wednesday. Italian interests were highlighted this week as one of their major companies purchased heavily. After just 4 sales this season this buyer has bought 39% of what they secured at auction all last season. He purchased a big volume of superior superfine wools in the Carmichael section of our catalogue from Mudgee and the New England at good premiums (up to 180 cents clean) above market rates. We also had a big run of excellent XBs in the Carmichael section which sold well. The good premiums (5-10%) that RWS certified wools are getting is also worth noting.

The Australian wool production forecasting committee has predicted shorn wool production is expected to rise by 5.2% (up to 310mkg) when compared to last season. This is up by 26mkg from just 2 years ago due to excellent seasonal conditions coming out of the drought and good lambings over the past 2 seasons.

In more Covid-19 news, as we know all businesses must have QR codes - this is a requirement for shearing sheds as well. Some sheds in southern NSW were inspected with fines and infringement notices issued for non-compliance. Growers are reminded to ensure that QR codes are available for use or a sign-in register is to be provided for all farm workers.

Market should be firm next week.

Southern Aurora Fwd Prices

Micron

Date

Low

21

Nov. 21

1240

Main Buyers (This Week)

1

Techwool Trading

2851

2

Fox & Lillie

2420

3

Tianyu Wool

2307

4

Endeavour Wool

1925

5

Australian Merino

1484

6

PJ Morris Wool

948


Eastern Market Indicators (AUD cents/kg clean)

1335 cents ê 37 cents compared with 13/08/2021

Northern Market Indicators (AUD cents/kg clean)

1428 cents ê 35 cents compared with 13/08/2021

   AUD/USD Currency Exchange

0.7264 ê 0.01 compared with 13/08/2021

13th August, 2021

Friday, August 13, 2021

 WEEKLY MARKET REPORT

Week Ending 13th August, 2021

 AWEX Northern Micron Indices Comparison

AWEX INDEX

This Week

S06/21

This Week

M06/21

Last Sale

S02/21

Sydney

Change

Last Year

Sydney

Sydney Yearly

Change

17

2454

2378 2538
-84 1478 +976

18

2039

2020

2129

-90

1272

+767

19

1698

1704

1768

-70

1126

+572

20

1377

1403

1438

-61

1083

+294
21 1303n 1293 1342 -39 1081n +222
 26 780n 773n - - 765n +15

28

500n

489n

530n

-30

520n

-20

MC

903n

938n

948n

-45

716n

+187

OUCH!! A PAINFUL START TO SALES.

It was a bad resumption to wool sales after the 3 week winter recess. Most participants were hopeful of a solid market even with forecasts predicting 57,000 bales 2 weeks ago. Last Friday, this fell to 53,000 bales and with the FRX in our favour by over 1.5 cents the market was looking to be just in buyers’ favour when auctions commenced. Up until one of China’s main buyers suddenly withdrew from the market only minutes before selling started. This resulted in the market almost “free-falling” on Tuesday with losses ranging from 130 cents for 16.5s in Melbourne to 40 cents for 21s. The market looked to steady a bit on Wednesday with a few finer microns losing 10 to 20 cents and all others 5 to 10. Hopes were up for a leveling market in Fremantle which concluded up to 20 cents dearer. Melbourne finished the sale in isolation on Thursday with < 17.5 losing more ground and coarser microns slightly up. The AWEX EMI lost 56 cents to 1372 and fell to 1010 in US$ terms (a 55 cent loss). By the numbers, finer than 19 micron fell by 70 to 90 cents with broader wools 40 to 60 cheaper. Again, it was the finer microns that took the brunt of the losses in the skirtings as < 18 micron lost 70 to 100 cents with > 19 reduced by 30 to 50 cents. Cardings lost anywhere from 30 to 100 cents depending on type as the 3 MCIs lost an average of 45 cents - all still sit above 900 cents (903 to 938). The crossbred sector was the least affected as opening session falls of 20 to 30 cents was the only movement for the sale. The pass-in rate skyrocketed to 33%.

So why the big fall?? The absence of one of China’s largest processors for the whole sale and the quieter buying patterns of 2 other major buyers was a main reason, while the annual discussion over big quantities after a recess still rages. One solution to avoid a large catalogue after a recess is to shorten the break to 2 weeks but getting buyers/brokers to agree on this is akin to saying Covid-19 is not spreading!! Chinese demand was poor at best but India, Italy and the Czech Republic seemed to maintain their pre recess buying patterns albeit at lower prices. Covid worries (Delta strain spreading rapidly) could have a dampening effect on demand from China in the short term. The ability to move greasy wool further down the processing pipeline has suddenly (over the recess) become a big hurdle to jump as some exporters are still experiencing financial constraints despite many “letters of credit” being opened during the break. The shipping and supply chain delays that have been a major problem and still pose some difficulties could be exasperated as a dock worker has tested positive to Covid-19 causing the closure of a major container terminal. The (1.35 billion US$) state-of-the-art Ningbo container terminal is located 100km south of Shanghai and was the 3rd busiest container port in the world last year.

Quantities have reduced sharply to 41,000 bales next week but may not be enough to halt the markets slide. We are hope they’re wrong!!


Southern Aurora Fwd Prices

Micron

Date

Low

21

Nov. 21

1310

Main Buyers (This Week)

1

Techwool Trading

5527

2

Endeavour Wool

2603

3

Australian Merino

2466

4

Fox & Lillie

2298

5

Modiano Aust.

2213

6

PJ Morris Wool

1919


Eastern Market Indicators (AUD cents/kg clean)

1372 cents ê 56 cents compared with 14/07/2021

Northern Market Indicators (AUD cents/kg clean)

1463 cents ê 59 cents compared with 14/07/2021

   AUD/USD Currency Exchange

0.7463 ê 0.0099 compared with 14/07/2021