Weekly Market Reports


30 April 2021

Friday, April 30, 2021

 WEEKLY MARKET REPORT

Week Ending 30th April, 2021

 AWEX Northern Micron Indices Comparison

AWEX INDEX

This Week

S44/20

This Week

M44/20

Last Sale

S43/20

Sydney

Change

Last Year

Sydney

Sydney Yearly

Change

17

2304

2305 2274n
+30 1697 +607

18

1948

1951

1916

+32

1518

+430

19

1637

1648

1595

+42

1414

+223

20

1365

1367

1333

+32

1362n

+3
21 1277n 1300 1262n +15 1370 (M) -70 (M)
 26 - 793n 794n (M) -1 (M) 861 (M) -68 (M)

28

515n

520

515n

0

661n

-146

MC

922n

917n

798n

+25

840n

+82

LARGE QUANTITIES, RISING A$, NO WORRIES!!

With the anticipated big offering this week of over 50,000 bales some in the trade were fearful that the extra volume catalogued would be too much for buyers and exporters to handle. After last series’ good gains, especially for sub 19s, the rush to capture the rising market added 6,000 extra bales to the roster. The market started on a solid but tentative note in Sydney in the opening session with Melbourne adding double digit gains to almost all MPGs. Momentum built on the second day as gains ranged from 10 to 50 cents depending on centre and micron. By week’s end rises of 30 to 40 cents covered all merino fleece microns bar 21s which gained 15 cents. Skirtings followed their fleece counterparts to record 20/30 cent lifts on most types with < 18.5 micron and < 2.5% VM 35 to 50 cents to the good. Cardings also kept up last sale’s momentum as the MCI rose by 25 cents to 922. All types in this sector recorded gains of 10 to 40 cents. Crossbreds had an up and down sale to finish the series about 10 cents cheaper. The AWEX EMI jumped by 30 cents to 1342 (2.3%), its largest weekly gain since mid February. In US$ terms the rise was just as impressive, 34 cents to 1045 (3.35%) as the FRX strengthened by 1 cent to 78 cents. Growers were happy with the rising market as the pass-in rate was the lowest since the end of January at 6.4%

The market came under more pressure this sale as buyers scrambled to secure wool. Medium types were on par with the finer wools as far as gains were concerned all lifting by an average of 35 cents. Buyers looked for value in the rising market and the lower types benefitted as they became buyers’ “target wools” to try and cheapen up their orders. This strategy did not go to plan as some of these types cost just as much as some “straight types” by the end of the sale. The smatterings of business that have prevailed in the market outside of China for some time now became even more prevalent this series as the extra enquiry and written business from many major players in India and Europe (catching the Chinese unaware) pushed the market to new levels even with the largest offering since mid March and the ascending FRX. When these 2 factors combine it is a distinct disadvantage to Aussie woolgrowers unless demand outstrips all other factors as we saw this week. It is great to see some competition to the Chinese juggernaut that buys 80% of our wool and has been a very resilient customer and almost solely responsible for the recovery in the wool market since the low point of 858 cents in early September - a massive 64% gain to date.

Is this the start of the recovery everyone has been waiting for?? Signs are promising that the post Covid-19 global economy is growing but a full recovery is some time off. Signs for a solid market next week are good as Melbourne and Fremantle finished on a dearer note on Thursday. 48,000 bales are on offer.

Southern Aurora Fwd Prices

Micron

Date

Low

21

July 21

1290

Main Buyers (This Week)

1

Techwool

7664

2

Fox & Lillie

4045

3

Endeavour Wool

3970

4

Tianyu Wool

3553

5

Aust. Merino

3090

6

PJ Morris

2261

Eastern Market Indicators (AUD cents/kg clean)

1342 cents é  30 cents compared with 23/04/2021

Northern Market Indicators (AUD cents/kg clean)

1421 cents é 23 cents compared with 23/04/2021

   AUD/USD Currency Exchange

0.7789 é 0.0081 compared with 23/04/2021

23 April 2021

Friday, April 23, 2021

 WEEKLY MARKET REPORT

Week Ending 23rd April, 2021

 AWEX Northern Micron Indices Comparison

AWEX INDEX

This Week

S43/20

This Week

M43/20

Last Sale

S42/20

Sydney

Change

Last Year

Sydney

Sydney Yearly

Change

17

2274n

2263n 2148
+126 1749n +525

18

1916

1916

1833

+83

1593

+323

19

1595

1576

1546

+49

1483

+108

20

1333

1315

1308

+25

1443

-110
21 1262n 1239 1250n +12 1438n -176
 26 800n 794n 800n (M) -6 (M) 865 (M) -65 (M)

28

515n

528

510n

+5

674n

-159

MC

897n

910n

877n

+20

865n

+32

FINER WOOLS LEAD THE WAY

The solid finish to wool sales in Melbourne and Fremantle late in last week’s series gave hope that the market could reverse last week’s cheaper trend. All the talk on the showfloor was for a dearer market with emphasis on the sub 19 micron types with broader spec wools just holding their own or in buyers’ favour depending on how good or bad test results were. The market exploded into action from the opening lot with all Merino microns adding to their value regardless of micron, VM or mid-breaks with 17s in Sydney jumping 108 cents on the opening day. The market did steady in the final session as finer microns added to their values with broader types unable to hold the previous days increases to lose 10/15 cents. By week’s end 18.5 and finer added 70 to 130 cents with 19s and broader lifting by 10 to 50 cents. Skirtings also commenced the sale in a hurry with rises of 30/40 cents across the board with < 17.5 micron with < 2% VM 80 to 100 cents dearer. The final session saw the urgency come out of the sale room as 18 micron and coarser types give back 15 to 20 cents from the previous day. Cardings added money to their solid sale last week to average a 20 cent gain across the 3 centres with their MCIs now averaging 910 cents as all types in this sector were 20 to 50 cents higher. The crossbred sector had the quietest sale as quotes were in sellers’ favour for most types in this sector. The AWEX EMI added 21 cents to 1312 (16 cents in US$ terms) to 1011 as the FRX barely moved from 77 cents. Even with the rising market the pass-in rate was still on the high side at 10.7%.

Fine types continued their trend of recent months getting dearer while broader microns look to be in some sort of holding pattern with very little price change. As we have stated recently, with the good season pushing wool coarser by 1 to 1.5 micron, the volume of sub 19s is decreasing and broader micron wools are on the increase, thus the less volume in the finer sector of the market is pushing prices higher and the bigger volume and heavier VM levels of coarser types are causing buyers to struggle to place these wools despite steady enquiry and the stable FRX. China led the enquiry for new business with spatterings of new business written outside China with these few new containers immediately assisting the market. Of course the market is dependent on consumer demand with the easing of restrictions as vaccines get rolled out, encouraging more people to spend money which will be the key driver to lifting demand. Global economies will grow in 2021 but not as quickly as the IMF predicted as some countries vaccine rollouts are slower than anticipated and some countries experiencing more waves of Covid-19 such as India and Brazil. China, on the other hand, looks to be in recovery mode far more than other northern hemisphere countries. Their economic growth was 18% higher in the 1st quarter of 2021 than in 2020 when their economy shrank by 6%. Industrial output for March was up by 14% and retail sales grew by a massive 43% from March 2020.  With the rising market national volumes have grown to 50,800 bales with some sectors expecting a slight downward price adjustment.

Southern Aurora Fwd Prices

Micron

Date

Low

21

July 21

1250

Main Buyers (This Week)

1

Techwool

5422

2

Fox & Lillie

3668

3

Endeavour Wool

3501

4

Lempriere

2601

5

Tianyu Wool

2317

6

Aust. Merino

1982

Eastern Market Indicators (AUD cents/kg clean)

1312 cents ê 21 cents compared with 16/04/2021

Northern Market Indicators (AUD cents/kg clean)

1398 cents ê 43 cents compared with 16/04/2021

   AUD/USD Currency Exchange

0.7708 é 0.0400 compared with 16/04/2021

16 April 2021

Friday, April 16, 2021

 WEEKLY MARKET REPORT

Week Ending 16th April, 2021

 AWEX Northern Micron Indices Comparison

AWEX INDEX

This Week

S42/20

This Week

M42/20

Last Sale

S40/20

Sydney

Change

Last Year

Sydney

Sydney Yearly

Change

17

2148

2172 2118
+30 1748 +400

18

1833

1871

1828

+5

1593

+240

19

1546

1557

1582

-36

1513

+35

20

1308

1336

1365

-57

1493

-185
21 1250n 1245 1285n -35 1488n -238
 26 - 800n 796 (M) -4 (M) 899n (M) -99 (M)

28

510n

526

530n

-20

703n

-193

MC

877n

895n

877n

0

886n

-9


SALES RESUME ON A SOFTER NOTE

The resumption to sales after the 1 week Easter recess didn’t go to plan as far as some growers were concerned. An estimated catalogue of 52,000 bales was forecast when rosters were released last week but the totals were reduced to just under 50,000 by Monday as both buyer and seller were preparing for the market to fall marginally. This was the scenario that played out during the course of the sale as the AWEX EMI gave up 9 cents to 1291. In US$ terms the market tracked the opposite way to add 7 cents to 996, this due to the ascending FRX to 77.15 (up by 1.5%). The market fell early in the week as most participants expected but a last day recovery in Melbourne gave hope that the market has bottomed out for the moment. Finer types seemed to be in high demand as 18s and finer lifted by 5 to 40 cents to continue the trend since early in the year with finer microns becoming more valuable as the volume of these decreases with the good season pushing microns out by 1 to 1.5 broader than last season. AWTA figures back this theory up. This season has seen 15% less wool tested finer than 18.5 micron than the previous season. The trend was cheaper for 18.5 and coarser with falls of 25 to 60 cents as wools in this micron range increased in quantity with the good season, especially 19.5 and broader with higher VM lots penalised more and more. Skirtings had an up and down sale to finish the series about square with selected < 17.5 micron types with < 2.5% VM up by about 20 cents. The ever increasing VM levels could be a hindrance to advancing prices as skirtings are becoming more cotted and heavier in colour making them harder to place in orders. Cardings also had a quiet sale to have most types unchanged for the week bar high VM LKS being quoted 10 cheaper. Crossbreds couldn’t maintain their pre-Easter levels with falls ranging from 5 to 20 cents. The national pass-in rate was higher at 14% as some growers resisted the falling market. 

The well earned recess was a good chance for everyone to catch their breath. It gave buyers and exporters a chance to refuel their exhausted bank accounts. The big wool exports expenditure for February/March shipments was the main reason for stress on exporters’ finances but things are on the improve with funds now coming back to Australia with the arrival of wool in China and the week’s recess relieving some of the logistics problems for the short term. Interesting to note that Chinese imports of wool were up 64% this past February compared to a year ago.

The anticipated large offering and the stronger FRX were the main reasons for this week’s fall. The final volume of wool offered was 12% down from the original forecast and, with passed-in and withdrawn wool adding up to over 16%, just 39,700 bales were actually to the trade. As finer wools get dearer and broader types cheapen, the gap between them grows. The difference was 756 cents from 17 to 21 micron in Melbourne a month ago, now it’s out to 927 cents (2172 to 1245). With the market’s recovery in Melbourne on Thursday, things look good for next week. We sold some passed-in lots from this week’s sale this morning for increases of 30/40 cents from their passed-in prices. We open proceedings on Tuesday with 760 bales on offer and a national catalogue of 45,500 bales.

Southern Aurora Fwd Prices

Micron

Date

Low

21

June 21

1260

Main Buyers (This Week)

1

Techwool

6249

2

Endeavour Wool

3790

3

Fox & Lillie

3119

4

Aust. Merino

3090

5

Tianyu Wool

2472

6

Modiano (Aust)

2418

Eastern Market Indicators (AUD cents/kg clean)

1291 cents ê 9 cents compared with 02/04/2021

Northern Market Indicators (AUD cents/kg clean)

1355 cents ê 14 cents compared with 02/04/2021

   AUD/USD Currency Exchange

0.7712 é 0.0104 compared with 02/04/2021

1st April, 2021

Thursday, April 01, 2021

 WEEKLY MARKET REPORT

Week Ending 1st April, 2021

 AWEX Northern Micron Indices Comparison

AWEX INDEX

This Week

S40/20

This Week

M40/20

Last Sale

S39/20

Sydney

Change

Last Year

Sydney

Sydney Yearly

Change

17

2118

2116 2102
+16 1743 +375

18

1828

1831

1799

+29

1578

+250

19

1582

1585

1571

+11

1508

+74

20

1365

1366

1365

0

1463

-98
21 1285n 1270 1280n +5 1458n -173
 26 - 804n 788n (M) +16 (M) 951 (M) -147 (M)

28

530n

526

510n

+20

703n

-173

MC

877n

894n

876n

+1

899n

-22

1,300 A NICE NUMBER TO FINISH ON!!

The market’s subtle rises this week and last have seen the AWEX EMI finish this run of sales at 1300 cents - an increase of 143 cents (11%) since sales resumed in January. The best performing microns have been the fine and superfine types (< 18.5) which have averaged a 246 cent gain in that time. Broader than 19 micron have lifted 116 to 192 cents, with the gap between 19 and 21 micron widening from 210 cents at the start of the year to 297 cents now. The way the days fell in March, we were able hold 5 sales with a total offering of 224,200 bales - the largest March offering in 10 years. As we stated, the market rose by 15 cents to 1,300 with fine wools < 19 micron the main beneficiary gaining 10 to 30 cents. Broader types ended the sale either side of firm by 5 cents. Skirtings had good rises over both days with < 2.5% VM lots 25 to 35 cents to the good and all others 15 to 20 cents better. Cardings had a pretty stable week with no real change in any centre ending with an average movement of -4 cents. Crossbreds also made minimal gains of 5 to 15 cents with the national pass in rate identical to the previous series at 9.5%. The FRX was also a mirror image of its level from last sale at 76.05 cents.

A highlight of our catalogue this sale was the offering of 380 bales of NM wool from two growers under the “Responsible Wool Standard” (RWS) - a voluntary quality scheme founded in 2002 by the Textile Exchange. RWS engages with participants all along the pipeline from growers to retailers in fibre and materials industries.  It’s no secret that for some time now processors and an ever increasing number of retail brands have expressed their desire to purchase more and more NM wool as demand increases. As we have mentioned in previous market reports, oftentimes premiums have been few and far between and in stark contrast to some media reports of NM wool premiums running at 5 to 10%, this was again the case. NM types that were not in the RWS scheme were mainly the same level as prices achieved by “mulesed wool”. Some NM lots even making less money than same mulesed wool types, except a few burry WNR fleece types selling 6 and 8% higher than equivalent mulesed wool. The lots in the RWS scheme were a completely different story, with most lots averaging an 8 to 12% premium (80 to 150 cents) above the market - this equates to $140 to $270/bale better for fleece wools.

Competition was widespread amongst all traders and exporters from China, India, and a smattering of enquiry from Europe, as buyers put to one side concerns of logistical and finance problems keen to secure quantity before next week’s Easter recess. Problems with shipping and finance are still dominating show floor talk, but reduced volume did ease pressure slightly when trying to finance purchases. The original rostered catalogue of 48,800 didn’t eventuate with 44,200 bales being offered, a 10% reduction which has been the case for some time. The cutoff point for which sales are deemed too large looks to be around the mid to high 40,000 mark - any higher the market struggles and below this figure the market seems to cope quite well. A quick look at the yearly comparisons actually has this week’s market 13 cents higher than the same sale 12 months ago. March 2020 was a bad month for the wool market, collapsing by 294 cents (1581 to 1287) when the rot set in from Covid-19 ramifications - and we’re still in recovery mode. Next week is a recess, we’ll offer 1,400 bales on Wednesday, 14th April. Happy Easter to all!!

                                                    Southern Aurora Fwd Prices

Micron

Date

Low

21

April-June 21

1270

Main Buyers (This Week)

1

Techwool Trading

6249

2

Endeavour Wool

3790

3

Fox & Lillie

3119

4

Australian Merino

3090

5

Tianyu Wool

2472

6

Modiano (Aust)

2418

Eastern Market Indicators (AUD cents/kg clean)

1300 cents é 15 cents compared with 26/03/2021

Northern Market Indicators (AUD cents/kg clean)

1369 cents é 13 cents compared with 26/03/2021

   AUD/USD Currency Exchange

0.7608 é 0.0002 compared with 26/03/2021