Weekly Market Reports


14 February 2020

Friday, February 14, 2020

WEEKLY MARKET REPORT 

Week Ending 14th February, 2020

 AWEX Northern Micron Indices Comparison

AWEX INDEX

This Week

S33/19

This Week

M33/19

Last Sale

S32/19

Sydney

Change

Last Year

Sydney

Sydney Yearly

Change

17

2063n

2048

2080

-17

2587

-524

18

1928

1947

1943

-15

2490

-562

19

1833

1830

1834

-1

2342

-509

20

1800

1779

1800

+3

2306

-503

21 - 1773 1793(M) -20(M) 2281n(M) -508(M)
26 1121n 1160n 1091n +30 1368n -247

28

-

866

821(M)

+45(M)

1103(M)

-237(M)

30

-

678n

663(M)

-15(M)

928(M)

-250(M)

MC

1108n

1128n

1118n

-10

1183

-75

MARKET JUST HANGS IN

As expected, Coronavirus and its impact in China are still dominating the news and the flow-on effects for the global economy. It’s a given that economic growth will slow around the world but by how much and for what length of time is impossible to pinpoint, anywhere from 0.5 to 1.5% less growth forecast. The general consensus is this will last for the next 2 quarters at least. The economic slowdown in China is already taking effect as travel restrictions and a slow return to work for most of the population, is massively impacting consumer spending from food to electronics and clothing. The only factories allowed to resume operations thus far are those producing commodities that prevent the contagion, about 10%. It’s hoped another 30% of factories will start work this Monday and most others on 24th February. In regards to wool, port logistics in China are saying there should only be a one week delay for wool to reach its final destination, but this could stretch out to 2/3 weeks depending on availability of containers going back to China. The Chinese government is making an all-out effort to quell the spread of the virus. The big cities have set up screening stations at their entry points and airports and railway stations, with factories not allowed to have any workers on site from quarantined provinces. Many workers if possible are working from home.

The market’s reaction was minimal this week as the AWEX EMI lost just 9 cents to 1568 and 11 cents to 1054 in US$ terms. Fine merino fleece microns <18.5 lost 15 to 40 cents due mainly to a style adjustment from the superfine selection offered in the previous series. 19s and broader were in sellers favour. Skirtings had a worse sale than their fleece counter-parts giving up 40 to 60 cents while all types in the carding sector bar LKS fell by 20 to 30 cents. Crossbreds were the only shining light as increases ranged from 15 to 35 cents.

Europe was again the dominant buyer as China deals with the Coronavirus and many mills still not back into full production. The large capital expenditure of the major buyers has surprisingly been maintained over the past 3 weeks. If shipments are significantly delayed, the cash reserves of buyers will be tested in the short term. Another problem will be sourcing containers to fill with wool on ships returning to China. The lack of ships and containers arriving from China has dramatically fallen over the past 3 weeks which means the quick turnaround for their imports and our exports back to China has gone as has the “backload discount” the shipping companies offered to ensure full containers on the return leg. This now could be a thing of the past as a shortage of container space could escalate shipping prices. Market direction next week is any-ones guess.

Southern Aurora Fwd Prices              

Micron

Date

Low

21

March 20

1800

Main Buyers (This Week)

1

Techwool

5630

2

Fox & Lillie

3658

3

Endeavour Wool

2871

4

Modiano

2831

5

Michell Wool

1682

6

United Wool

1397


Eastern Market Indicators (AUD cents/kg clean)

1568 cents  9 cents compared with 07/02/2020


Northern Market Indicators (AUD cents/kg clean)

1604 cents  8 cents compared with 07/02/2020

   

AUD/USD Currency Exchange

0.6723  0.0030 compared with 07/02/2020

7 February 2020

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

31 January 2020

Friday, January 31, 2020

 WEEKLY MARKET REPORT 

Week Ending 31st January, 2020

 AWEX Northern Micron Indices Comparison

AWEX INDEX

This Week

S31/19

This Week

M31/19

Last Sale

S30/19

Sydney

Change

Last Year

Sydney

Sydney Yearly

Change

17

2038

2004

2082

-44

2538

-500

18

1893

1892

1917

-24

2437

-544

19

1795

1791

1809

-14

2304

-509

20

1753

1767

1778

-25

2273

-520

21 1731n 1757 1766 -35 2249n -518
26 1081n 1108n 1111n -30 1343n -262

28

803n

804

838n

-35

1024n

-199

30

-

649

690 (M)

-41 (M)

848 (M)

-199 (M)

MC

1114n

1136n

1145n

-31

1165

-51

WHERE TO NOW? WHO KNOWS??

The wild volatility continued this sale just as the market has done since the New Year’s resumption and indeed a pattern that started last August. Sure there are always outside factors that can influence the market but we seem to be in a perfect storm of new causes that is sending the market on the roller-coaster ride we are on at the moment. The Coronavirus and extension of the Chinese New Year till the 8th February and a liquidity problem due to banks in China on holidays has hindered normal buying patterns as everyone second guesses what the market might do and virtually no-one has been able to make a firm prediction. There will be a definite effect on the global economy as economic growth slows and consumer confidence will worsen before it improves. 

The market opened, as all expected, with heavy losses across all microns as the opening day’s 56 cent loss for the AWEX EMI was the largest daily fall since August. The market staged a recovery in the final session - exactly half the losses (28 cents) clawed back. By week’s end the EMI had lost 28 cents to 1548, 38 cents in US$ terms to 1043. Losses ranged from 45 to 25 cents for all microns bar 19/19.5 that retreated by only 5 to 15 cents. The better style spec types were, in some cases, sold with virtually no discounts but, at the other end of the scale, the average and inferior style types (MF6 & MF7) were up to 200 cents cheaper than the previous sale. Skirtings suffered heavier losses, 70 to 90 cents for 17 micron and finer, 90 to 120 cents for all others and up to 140 cents for poorer style lots. Cardings couldn’t maintain the gains of the 2 previous sales as falls of 20 to 40 cents covered all wool in this sector. Crossbreds also fell out of favour as 26 to 32 micron fell 30 to 40 cents.

Global stock markets reacted quickly to the growing concern of the Coronavirus but did recover most of the losses later in the week. The domestic travel restrictions in China and their extended Lunar New Year celebrations have hampered some mills’ operations that rely on itinerant workers that have gone back to their home provinces and are unable to return to work. Orders were virtually non-existent on the first day but order was restored in the final session as sanity prevailed as FRX against the US$ fell by 1.25 to 1.86% giving manufacturers buying in US$ a cheaper buy rate thus pushing the market higher in the final session. Also helping was the high pass-in rate (37%) on the first day and 13% (5920 bales) withdrawn for the week.

A pleasing aspect was the dominance of the world’s largest top-maker from Europe for Merino types with traders very active and indent buyers from China making their presence felt in the final session. So where to from here is anyone’s guess. To predict a price movement direction would be a brave move but hopefully the recovering market is a sign of things to come as national quantities should be around 40,000 bales per week for the next month.

Southern Aurora Fwd Prices              

Micron

Date

Low

21

March 20

1770

Main Buyers (This Week)

1

Techwool

3470

2

Fox & Lillie

2442

3

Modiano Aust.

1993

4

Endeavour Wool

1574

5

United Wool

1551

6

Michell Wool

1483


Eastern Market Indicators (AUD cents/kg clean)

1548 cents ê 28 cents compared with 24/01/2020


Northern Market Indicators (AUD cents/kg clean)

1578 cents ê 39 cents compared with 24/01/2020

   

AUD/USD Currency Exchange

0.6739 ê 0.0124  compared with 24/01/2020

24 January 2020

Friday, January 24, 2020

 WEEKLY MARKET REPORT 

Week Ending 24th January, 2020

 AWEX Northern Micron Indices Comparison

AWEX INDEX

This Week

S30/19

This Week

M3019

Last Sale

S29/19

Sydney

Change

Last Year (Wk24)

Sydney

Sydney Yearly

Change

17

2082

2073

2122

-40

2538

-456

18

1917

1922

2005

-88

2432

-515

19

1809

1803

1909

-100

2313

-504

20

1778

1776

1878

-100

2277

-499

21 1766 1758 1870n -104 2245n -479
26 1111n 1116 1195n -84 1298n -187

28

838n

835

914n

-76

934n

-96

30

-

690n

711 (M)

-21 (M)

741 (M)

-51 (M)

MC

1145n

1131n

1123n

+22

1186

-41

HIGHER VOLUME STRETCHES MARKET

The market opening felt the pain of the increased volume of bales in the Australian wool market this week. After last Tuesday’s increases between 100 and 120 cents, this week’s offering jumped from earlier predictions of 49350 bales to 59900 bales. With this came discounts from the start as buyers struggled to find the finance for sudden increased volumes of wool.  A three day sale in Melbourne saw them open up, selling on their own, on Tuesday. The softer tone was evident when selling began in the merino sector. The individual Micron Price Guides (MPGs) for 17.0 micron and coarser falling by 14 to 40 cents by day’s end.

As Sydney did not sell last Thursday or Tuesday this week, everything was pointing in one direction for when our market opened Wednesday. Fremantle was in the same boat and both centres were pulled back to match Melbourne’s levels. Freemantle dropped between 9 and 31 cents, not as great a drop as Sydney due to Freemantle selling last Thursday and taking some of the losses then. Sydney, however, dropped between 37 and 110 cents of which 19 micron and broader took the biggest brunt of the losses losing between 98 and 110 cents respectively. These drops, compared to the previous Tuesday’s sale, meant that a lot of wool was pulled out of the market ending in a week where the offering ended up being 52,666 bales of which 15.9% was passed in, continuing at historically higher than normal rates. Thursday seemed to find a consolidated level across all three centres as buyers seemed to be happy with securing as much wool at these levels as they could. By the end of Thursday’s selling period the market seemed to be a bit more positive. All wool types were very firm to 10c dearer with most attention drawn back to the merino fleece sector of 19 micron and broader.

The AWEX Eastern Market Indicator (EMI) lost 33c or 2% this week to move to 1576c clean/kg. The EMI in US Dollars (USD) was lower again as the 0.6% lower exchange rate helped depreciate that indicator by 2.6%. The USD EMI adjusted down to a 1082c US clean/kg close for the week which was a 29 USC loss. Even with these drops the EMI is still 18c clean/kg ahead of the last sale before Christmas - still very good levels. Merino Skirtings had strong support all week ending the week fully firm to 20 cents dearer across all microns. The oddment sector defied the trend of all other sectors. Locks in particular were well sort after pushing prices up by 30 to 40 cents. The crossbred sector took a fair hit this week as well as they seemed to be out of favour with the buyers all together losing between 21 and 84 cents.

Next week sees another 40680 bales go under the hammer. As Monday is a public holiday there will only be two selling days, Wednesday and Thursday. Also China will celebrate their lunar New Year and will pretty much be shut for the week so it will be very interesting to see how our Australian Wool Market performs. Fingers crossed, firm to dearer!

HAPPY AUSTRALIA DAY and safe travels to anyone travelling!

Southern Aurora Fwd Prices              

Micron

Date

Low

21

February 20

1760

Main Buyers (This Week)

1

Techwool

7358

2

Endeavour Wool

4157

3

Aust. Merino

3324

4

Tianyu Wool

3046

5

Modiano Aust

3026

6

PJ Morris Wool

2619


Eastern Market Indicators (AUD cents/kg clean)

1576 cents ê 33 cents compared with 17/01/2020


Northern Market Indicators (AUD cents/kg clean)

1617 cents ê 61 cents compared with 17/01/2020

   

AUD/USD Currency Exchange

0.6863 ê 0.0044  compared with 17/01/2020

17 January 2020

Friday, January 17, 2020

 WEEKLY MARKET REPORT 

Week Ending 17th January, 2020

 AWEX Northern Micron Indices Comparison

AWEX INDEX

This Week

S29/19

This Week

M2919

Last Sale

S25/19

Sydney

Change

Last Year (Wk24)

Sydney

Sydney Yearly

Change

17

2122

2082

2005

+117

2523

-401

18

2005

1930

1907

+98

2407

-402

19

1909

1838

1818

+91

2304

-395

20

1878

1803

1792

+86

2256

-378

21 1870 1783 1783n +87 2225 -355
26 1195n 1166 1180n +15 1339 -144

28

914n

865

914n

0

941n

-27

30

-

711

729 (M)

-18 (M)

719 (M)

-8 (M)

MC

1123n

1089n

1071n

+52

1202

-79

NEW YEAR BUT SAME RESULT!

As has been the case for a number of years now the market started the new year with a bang. After last week’s 5% rise in the South African market talk on the showfloor was of a similar scenario. The chatter was spot on as all merino microns added 100 to 120 cents on Tuesday on the Eastern Seaboard. On Wednesday, as Fremantle came on line, Sydney was a fraction cheaper (10 cents) Melbourne mixed and after an explosive start Fremantle could only add 30/40 cents to their pre-Christmas values as talk of a correction was common. The big downward price adjustment came on Thursday with Sydney not selling with the other 2 centres as all microns lost 25 to 100 cents. After the wild fluctuations the AWEX EMI did post a 51 cent rise to 1609.

Skirtings also benefitted from the initial jump in the market to have this sector 70/90 cents to the good with cardings ranging from 40 to 70 cents higher. The crossbred sector couldn’t go with their merino counterparts and added just 10 cents to their values. With the market’s jump the EMI is equal to its spring peak in late September (1609) and just the 2nd occasion since August that 1600 cents has been achieved. Even though the market rose there are big price discrepancies between the 3 centres. As Sydney escaped the big closing falls on Thursday we are well ahead of Melbourne’s levels (78 cents on 18s and 19 to 21s, 40 cents for 16.5 to 17.5 and 18.5s.) This could signal more price reductions next sale as growers rushed wool into next week after Tuesdays jump to try and capture the rises pushing the roster to 59,900 bales, a 14% (8,100 bales) increase since Monday. It will be the largest sale since April 2018. This opening sale (52,200 bales) was the largest since the corresponding sale last year. Buyers are somewhat perplexed as to why growers continue to rush wool onto the market after big rises pushing volumes to levels where finances aren’t enough to buy all the wool on offer at competitive levels. If the rises weren’t so large, like before Christmas and late October, we could avoid the situation of big rises leading to large offerings, then buyers virtually running out of money to buy all the available wool and the market losing all the previous gains. Buyers seem to think that volumes over 45,000/sale becomes a bridge too far. That doesn’t augur well for next week and then Chinese New Year the following sale. Some exporters did write some business last night - enough to steady the market next week is anyone’s guess.

Southern Aurora Fwd Prices              

Micron

Date

Low

21

February 20

1760

Main Buyers (This Week)

1

Techwool

8058

2

Tianyu Wool

3433

3

Aust. Merino

3410

4

Kathaytex

2839

5

Fox & Lillie

2783

6

Michell Wool

2498


Eastern Market Indicators (AUD cents/kg clean)

1609 cents é 51 cents compared with 20/12/2019


Northern Market Indicators (AUD cents/kg clean)

1678 cents é 79 cents compared with 20/12/2019

   

AUD/USD Currency Exchange

0.6907 é 0.0062  compared with 20/12/2019

20 December 2019

Friday, December 20, 2019

WEEKLY MARKET REPORT 

Week Ending 20th December, 2019

 AWEX Northern Micron Indices Comparison

AWEX INDEX

This Week

S25/19

This Week

M25/19

Last Sale

S24/19

Sydney

Change

Last Year (Wk24)

Sydney

Sydney Yearly

Change

17

2005

1989

1925

+80

2532

-527

18

1907

1863

1815

+92

2402

-495

19

1818

1789

1723

+95

2247

-429

20

1792

1771

1708

+84

2178

-386

21 1783n 1769 1705n +78 2145 -362
26 1180n 1164 1120n +60 1205n -25

28

914n

913

840n

+74

855n

+59

30

-

729

671 (M)

+58 (M)

693 (M)

+36 (M)

MC

1071n

1051n

1040n

+31

1146

-75

CONFIDENCE IS KING!!

Last sale’s upward shift in the market accelerated this week - the final sale before the 3 week recess. The AWEX EMI rose by 55 cents to 1558 and 32 cents in $US terms to 1066 despite the FRX staying well above 68 cents. Buyers were keen from the get-go with large increases in the opening session followed by a more measured approach on the final day but still good gains. All fleece microns posted gains of 75 to 95 cents regardless of style or any faults. Skirting’s were also in good demand as buyers pushed all types in this sector 60 to 90 cents higher. Crossbreds were also keenly sought after as most microns added 60/70 cents. The only sector to not explode in prices was cardings. Sydney and Fremantle averaged 20 cent rises while Melbourne lost 7 cents to have the 3 centres’ average price at 1070.

Despite the anticipated large offering (39,400), the high FRX and shipping logistics delays, the market had its largest weekly increase for 12 sales. The final volume offered was 12% lower than originally rostered due to a high withdrawal rate and with no chance to buy any meaningful quantity till mid January buyers were under pressure to fulfil outstanding commitments from the reduced selection on offer.

This year, particularly the final 6 months, has been one of the toughest periods for all in the industry. Firstly growers are still combatting the worst drought for over 100 years, massive reductions in sheep numbers, poor quality wool and a drop in the market of 17% (1862) from 12 months ago to 1558. The peak of the market was in mid February at 2027 and the low point was early September when the EMI got down to 1365, a 33% swing. At the high point in February just 252 cents separated 17 from 21 micron (2620 to 2368). At the cheapest point of the year the spread wasn’t much wider, 17s at 1842 and 21s were 1487 - a 355 cent difference. Exporters have had a year to forget as well. The high prices from last year into 2019 proved unsustainable as global events that we have spoken about in several reports conspired against them as consumer demand weakened. The market’s demise started in May and peaked in August, falling 163 cents in a single week only to stage a remarkable recovery in S11 climbing by 170 cents. Buyers, understandably, couldn’t trade with any confidence with such wild swings and are still feeling the effects now. The British election outcome and the softening of trade tariffs have boosted confidence that will hopefully carry on into the new year.

Southern Aurora Fwd Prices              

Micron

Date

Low

21

February 20

1690

Main Buyers (This Week)

1

Techwool

4996

2

Fox & Lillie

4068

3

Endeavour Wool

3581

4

Aust. Merino

3430

5

Tianyu Wool

2881

6

PJ Morris

2077


Eastern Market Indicators (AUD cents/kg clean)

1558 cents é 55 cents compared with 13/12/2019


Northern Market Indicators (AUD cents/kg clean)

1599 cents é 72 cents compared with 13/12/2019

   

AUD/USD Currency Exchange

0.6845 ê 0.0040  compared with 13/12/2019

13 December 2019

Friday, December 13, 2019

 WEEKLY MARKET REPORT 

Week Ending 13th December, 2019

 AWEX Northern Micron Indices Comparison

AWEX INDEX

This Week

S24/19

This Week

M24/19

Last Sale

S23/19

Sydney

Change

Last Year

Sydney

Sydney Yearly

Change

17

1925

1950

1908

+17

2532

-607

18

1815

1815

1808

+7

2402

-587

19

1723

1727

1706

+17

2247

-524

20

1708

1711

1683

+25

2178

-470

21 1705n 1709 1681n +24 2145 -360
26 1120n 1149 1135n -15 1205n -85

28

840n

854

833n

+7

855n

-15

30

-

671

648 (M)

+23 (M)

693 (M)

-22 (M)

MC

1040n

1058n

1061n

-21

1146

-106

MARKET BACK OVER 1500!!

After 7 straight days of falls adding up to almost 100 cents, the market had an unexpected turnaround as the AWEX EMI posted an 11 cent gain to 1503. Several factors were pointing to further losses for the market: the large offering, adverse FRX rates, the ongoing poor quality and global economic concerns almost certain to lead to a cheaper market. High rates of withdrawn wool (12%, 6000 bales) saw a much more manageable quantity for buyers to handle and some hidden prompt that appeared was all the impetuous the market needed to strengthen.

Despite the small upward adjustment this series was one of the most impressive sales of the season insofar as the big players of each segment dominated, local based traders to China led the merino sector, the biggest top-maker in the world was atop the crossbred sector and the largest global carbo processor was No.1 for cardings and oddments. Most fleece microns added 10 to 25 cents to their values. Skirtings had a mixed sale as the opening sessions’ gains were given up on the last day to leave them just in sellers’ favour for the week. Cardings averaged 19 cent losses across the 3 centres as all types fell by 10 to 30 cents. Crossbreds also had mixed results as < 26 microns were 15 cents lower while broader types added 10/20 cents.

The steadying market was welcome news after 3 weeks of falls and no talk that the market was about to stop its downward trend. Even after the high percentage of withdrawals buyers were faced with the largest catalogue since May but the end result was pleasing to all participants. The national turnover for wool sold passed the $1billion mark this week but it took 7 more sales to reach this milestone than it did last season - a result of the falling market and less wool offered (80,650 bales 10%). In what will be good news for the global economy (and the wool market) the US has agreed to halve tariff rates on $350bn worth of Chinese goods, some of which were as high as 25% and, in return, China would boost purchases of US farm products. This latest agreement should avoid US threats to impose tariffs on more than $150bn worth of Chinese exports that were due to start next week. Stock market reaction was swift as Asian markets rose 2% and Wall Street again set new records. Confidence is a great thing!! The market should end the year on a solid to dearer note for the final sale of the year.

Southern Aurora Fwd Prices              

Micron

Date

Low

21

January 20

1670

Main Buyers (This Week)

1

Techwool

5954

2

Fox & Lillie

4166

3

Endeavour Wool

4068

4

Tianyu Wool

3195

5

Aust. Merino

2922

6

PJ Morris

2323


Eastern Market Indicators (AUD cents/kg clean)

1503 cents é 11 cents compared with 06/12/2019


Northern Market Indicators (AUD cents/kg clean)

1527 cents é 3 cents compared with 06/12/2019

   

AUD/USD Currency Exchange

0.6885 é 0.0046  compared with 06/12/2019

6 December 2019

Friday, December 06, 2019

WEEKLY MARKET REPORT 

Week Ending 6th December, 2019

 AWEX Northern Micron Indices Comparison

AWEX INDEX

This Week

S23/19

This Week

M23/19

Last Sale

S22/19

Sydney

Change

Last Year

Sydney

Sydney Yearly

Change

17

1908

1914

1980

-72

2513

-605

18

1808

1798

1863

-55

2379

-571

19

1706

1712

1744

-38

2218

-512

20

1683

1674

1713

-30

2147

-464

21 1681n 1671 1716n -35 2129 -448
26 1135n 1133n 1168n -33 1205 -70

28

833n

835

855n

-22

855

-22

30

-

648n

694 (M)

-46 (M)

683 (M)

-35 (M)

MC

1061n

1077n

1054

+7

1183

-122

MARKET FALLS UNDER 1500 cents!!

Another tough week for the wool market as the downward trend continued on for the 3rd sale in a row. Steady falls all week saw the AWEX EMI peel off by 38 cents to fall below the 1500 cent mark to 1492 - its lowest point in 13 weeks, 357 cents lower than this sale last year. In US$ terms the loss was only 15 cents to 1020 somewhat cushioned by the strengthening FRX to 68.5 cents. This ascendency, along with the subdued demand, contributes to the falling market. Losses were most severe in the finer microns, < 18.5 giving up 50 to 70 cents while 19s and broader fell by 30/40 cents with the better style, good spec types less affected while the dustier/tender lots saw the discounts widen on these. Skirtings also took a hammering with all types falling by 50 to 80 cents. The only highlight was the Carding sector which added 7 cents to 1061 while crossbreds lost 20 to 30 cents.

A wane in demand, the logistical headache of shipping wool over the Christmas/New Year period, the timing of the Chinese New Year (25th January) and a sudden spike in offerings for the last 2 sales of the year are all conspiring to send the market on a downward spiral - 100 cents fall over the past 6 weeks. The large offerings and inability of buyers to deliver wool on time is severely hampering normal buying and shipping activities. This week was, in effect, the final opportunity to ship wool to China for arrival before their New Year shutdown so the large offering at this time is bad timing for exporters and mills. This means a 2 to 4 week additional financing period that is required for exporters for any wool destined for China that is bought over the next 2 sales if delivery is not “prompt”, one week for shipment delay due to Christmas and up to 2 weeks for the Chinese New Year shutdown. The margins are tight at the best of times let alone this situation when hand to mouth modus operandi that all the trade use.

AWTA released their November figures which saw a 1% fall when compared to the same month last year with the progressive total for the year running at 8.5% less wool tested than last season (127.5mkg to 139.4mkg) and 77,175 (10.5%) less bales offered than last season. Next week’s sale (48,500) could be the largest since end of April growing by 9,000 bales (23%) since last Friday, Melbourne’s catalogue ballooning by a massive 27%.

Southern Aurora Fwd Prices              

Micron

Date

Low

21

January 20

1680

Main Buyers (This Week)

1

Techwool

4100

2

Aust. Merino

3065

3

Fox & Lillie

2926

4

Endeavour Wool

2600

5

PJ Morris

1872

6

Tianyu Wool

1117


Eastern Market Indicators (AUD cents/kg clean)

1492 cents ê 38 cents compared with 29/11/2019


Northern Market Indicators (AUD cents/kg clean)

1524 cents ê 37 cents compared with 29/11/2019

   

AUD/USD Currency Exchange

0.6839 é 0.0074  compared with 29/11/2019

29 November 2019

Friday, November 29, 2019

WEEKLY MARKET REPORT 

Week Ending 29th November, 2019

 AWEX Northern Micron Indices Comparison

AWEX INDEX

This Week

S22/19

This Week

M22/19

Last Sale

S21/19

Sydney

Change

Last Year

Sydney

Sydney Yearly

Change

17

1980

1968

2008

-28

2487

-507

18

1863

1849

1885

-22

2372

-519

19

1744

1743

1781

-37

2188

-444

20

1713

1700

1738

-25

2141

-428

21 1716n 1700 1729n -13 2129 -413
26 1168n 1161 1200n -32 1335n -167

28

855n

845

899n

-44

946 (M)

-101 (M)

30

-

694

704 (M)

-10 (M)

753 (M)

-59 (M)

MC

1054

1079n

1052n

+2

1199

-146

MARKET STALLS!!

The recent pattern of price movement was broken this sale as the “up and down” direction over the past 6 to 8 weeks shifted to a falling trend now into its 5th selling day (a 50 cent reduction). Last week’s Thursday firming market in Fremantle gave a false hope that the market would tract upwards but that wasn’t to be. Steady falls over both days saw the AWEX EMI fall by 25 cents to 1530, a similar margin (22 cents) in US$ terms to 1035 despite the FRX falling by 0.30 of a dollar to 67.65 cents - a worrying sign when the market falls and the FRX goes in our favour.

All fleece types fell as all microns gave up 15 to 35 cents with the poorer style types (MF6/7) neglected even more by 50 to 80 cents. Only the very best style (MF3 and better) and NM lots were immune from the discounts. After a few sales of maintaining levels skirtings suffered losses of 30 to 50 cents except < 2.5%VM which halved those falls. All types in the Carding sector were fully firm to sellers’ favour and XBs recorded losses on both days to finish 30 to 45 cents off the pace.

Signs of weaker demand are coming to bear at the present time which is critical for the Autumn/Winter retail season in the Northern Hemisphere. Current price trends and the level of consumer confidence are reflecting the uncertain economic conditions in many countries. Many EU economies have weakened over the past 12 months as consumer confidence wanes there as well in Japan which is at its lowest level for 7 years and worst since 2017 in South Korea. On the flip-side US consumers remain upbeat with low unemployment, a strong economy and wages increasing and stronger consumer confidence in China - a welcome turnaround from low economic growth and the trade war impact with the USA.

More news from the AWI AGM: The main item was the ousting of one-time Chairman and long term director Wally Merriman. The board also announced a further reduction in expenditure and draw down of a further $7.5 million from its reserves due to the less than anticipated levy revenue as a result of less wool being sold, lower prices and the levy % down to 1.5% from 2% which started July this year. The board has also commissioned a review of WoolQ (the platform that has cost several $million). Over 41,000 bales are on offer next week giving the buyers too much of a chance to take a “pick and choose” approach to the market.

Southern Aurora Fwd Prices              

Micron

Date

Low

21

December 19

1700

Main Buyers (This Week)

1

Techwool

3975

2

Aust. Merino

3353

3

Fox & Lillie

3013

4

Endeavour Wool

2238

5

Tianyu Wool

2186

6

United Wool

1816


Eastern Market Indicators (AUD cents/kg clean)

1530 cents ê 25 cents compared with 22/11/2019


Northern Market Indicators (AUD cents/kg clean)

1561 cents ê 30 cents compared with 22/11/2019

   

AUD/USD Currency Exchange

0.6765 ê 0.0030  compared with 22/11/2019

22 November 2019

Friday, November 22, 2019

WEEKLY MARKET REPORT 

Week Ending 22nd November, 2019

 AWEX Northern Micron Indices Comparison

AWEX INDEX

This Week

S21/19

This Week

M21/19

Last Sale

S20/19

Sydney

Change

Last Year

Sydney

Sydney Yearly

Change

17

2008

1963

2027

-19

2472

-464

18

1885

1883

1920

-35

2343

-458

19

1781

1788

1818

-37

2204

-423

20

1738

1734

1773

-35

2172

-434

21 1729n 1723 1763n -34 2158 -429
26 1200n 1196n 1204n -4 1245n -45

28

899n

884

910n

-11

845n

+54

30

-

704

724 (M)

-20 (M)

734 (M)

-30 (M)

MC

1052n

1079n

1053n

-1

1180

-128

SAME OLD, SAME OLD ……

The recent pattern of “up and down” for the wool market continued on this series as the AWEX EMI slipped by 19 cents to 1555 - the exact amount of the previous week’s gains. In $US terms the downward shift was a similar figure, a 13 cent loss to 1057 as the FRX moved above 68 cents on Wednesday only to fall back below that level today. Last Thursday’s falling market was the precursor to this sale as falls across the 3 centres on Wednesday were followed by a more positive tone in the final session. All fleece microns suffered, falling by 20 to 40 cents with only the very odd best type or NM lot attracting any sort of premium up to 60 cents. Skirtings again looked to be far less affected by the ebb and flow of demand of their fleece counterparts and sold to sellers’ favour. Cardings also had an uneventful sale with some types in buyers’ favour to have the MCI shed just 1 cent. Crossbreds followed last sales pattern shaving up to 10 cents from their values.

The current price movement of the market continues on. The practice of exporters writing some new business and  buying wool and pushing up prices by 50 to 80 cents then being in the situation of the market going “too high too fast” has them immediately on the back foot and prices retract just as quickly as they were pushed up. The price fluctuation over the past month or so has been around 40 cents (1550 to 1590) as the EMI has been unable to break through the 1600 cent mark. When it does and if that level can be maintained is anyone’s guess.

The Australian Wool Production Forecasting Committee met this week and downgraded its shorn wool production for this season to 272mkg a 9.2% decline from 2018/19, the lowest since 1923/24. The 2 main reasons for this decline are higher slaughter rates (resulting in record prices for lamb and mutton) due to increased demand for red meat caused by the global outbreak of African Swine Flu which has resulted in 25% of the world’s pig population eradicated; and the persistent drought lowering numbers to 67 million, a 7.5% fall from 2018/19.

AWI held their AGM this morning and voting was conducted for the 3 vacant spots on the board. Of the eight candidates up for election, 2 new directors were voted in (Michelle Humphries and Noel Henderson) with incumbent director, David Webster, holding his position. One time Chairman, Wally Merriman, failed in his bid to be re-elected and Haddon Rig principal, George Falkiner, also was unsuccessful in his bid for a spot on the board. Fremantle’s firming market on Thursday bodes well for next week’s sale but how much will it rise??

Southern Aurora Fwd Prices              

Micron

Date

Low

21

December 19

1720

Main Buyers (This Week)

1

Techwool

5147

2

Endeavour Wool

2845

3

Aust. Merino

2679

4

Fox & Lillie

2623

5

Kathaytex Aust.

1830

6

PJ Morris Wool

1373


Eastern Market Indicators (AUD cents/kg clean)

155 cents ê 19 cents compared with 15/11/2019


Northern Market Indicators (AUD cents/kg clean)

1591 cents ê 19 cents compared with 15/11/2019

   

AUD/USD Currency Exchange

0.6795 ê 0.0003  compared with 15/11/2019