Weekly Market Reports


28 May 2021

Friday, May 28, 2021

 WEEKLY MARKET REPORT

Week Ending 28th May, 2021

 AWEX Northern Micron Indices Comparison

AWEX INDEX

This Week

S48/20

This Week

M48/20

Last Sale

S47/20

Sydney

Change

Last Year

Sydney

Sydney Yearly

Change

17

2330

2380n 2288
+42 1653 +677

18

1965

1963

1931

+34

1498

+463

19

1640

1633

1622

+18

1363

+227

20

1350

1336

1364

-14

1296

+54
21 1269n 1234 1299n -30 1275n -6
 26 - 729n 744 (M) -15 (M) 801 (M) -72 (M)

28

448n

455

458n

-10

600n

-152

MC

913n

898n

890n

+23

843n

+70

FINE WOOLS UP, BROAD WOOLS DOWN!

The market edged higher again this series (+5 cents) but the split in prices that comes into effect around the 19.5 micron mark is becoming more evident. The natural shift to coarser microns due to the good seasonal conditions is having a negative impact on fleece wools broader than 19/20 micron. Add the extra VM into the mix and these types are coming under more and more price pressure as the volume of broader/burrier fleece types comes onto the market increases. It’s the opposite story for < 19 micron wools as they continue to increase in value as their volume shrinks.

The AWEX EMI put on 5 cents to 1320 but gave back 2 cents to 1022 in US$ terms as the FRX dropped by 0.5% to 77.45 cents. The pass-in rate edged higher by 1% to 11% as some growers were caught by the sudden and, in some cases, very large falls for broader types. 18.5/19 micron rose by 20 cents with 18s and finer gaining 35 to 55 cents. Skirtings followed a similar pattern to last sale with < 18 micron and < 2.5% VM 20 to 40 cents dearer with all others solid. Cardings followed their combing counterparts with all types in this sector 15 to 30 cents to the good to see the MCI in Sydney rise by 23 cents to 913. Crossbreds continue to follow their cheapening pattern to fall by around 10 cents - their 4th consecutive week of falls with shearing costs now more than the return for some crossbred clips.

The buying strategies for merino fleece wools are worlds apart. Aggressive for sub-19 micron types but very cautious for broader wools. Many of these coarser types contain well above the 1% VM average that most orders require in China and the lack of FNF types is making it almost impossible to put them into orders that need to average below the 1% level. These higher VM lots > 20 micron took a beating this sale. Losses ranged between 100 to 150 cents clean (60 to 100 greasy) but the FNF to 2%VM types looked to be in line to where the MPGs finished.

As we have said in past reports, enquiry from outside of China is slowly on the improve as our critical Northern Hemisphere markets slowly emerge from their Covid-19 induced recessions and consumer spending gains momentum as lockdowns and restriction are lifted. More consumers are returning to “life as we knew it” which means working normally, catching up with people, going out and shopping. The short term outlook for prices to strengthen is coming from manufacturers in Europe and India with an increased level of enquiry that is being fielded by buyers at the moment. Italy, India (even with the pandemic almost uncontrollable) and the Chez Republic seem to be leading the charge for a price stable period or even a lift leading to the end of the season. Quantities will fall slightly to just 41,000 bales next week which should keep all buyers interested. We open the sale on Tuesday with 1,370 bales.

Southern Aurora Fwd Prices

Micron

Date

Low

21

Sept. 21

1250

Main Buyers (This Week)

1

Techwool

5740

2

Fox & Lillie

3397

3

Endeavour Wool

3352

4

Tianyu Wool

3060

5

United Wool

2566

6

Lempriere

2467

Eastern Market Indicators (AUD cents/kg clean)

1320 cents é  5 cents compared with 21/04/2021

Northern Market Indicators (AUD cents/kg clean)

1402 cents é 9 cents compared with 21/04/2021

   AUD/USD Currency Exchange

0.7742 ê 0.0041 compared with 21/04/2021

21 May 2021

Friday, May 21, 2021

 WEEKLY MARKET REPORT

Week Ending 21st May, 2021

 AWEX Northern Micron Indices Comparison

AWEX INDEX

This Week

S47/20

This Week

M47/20

Last Sale

S46/20

Sydney

Change

Last Year

Sydney

Sydney Yearly

Change

17

2288

2301 2258
+30 1625 +663

18

1931

1926

1896

+35

1473

+458

19

1622

1620

1592

+30

1339

+283

20

1364

1355

1339

+25

1278

+86
21 1299n 1264 1274n +25 1255n +44
 26 - 744n 755n (M) -11 (M) - -

28

458n

456

459n

-1

580n

-122

MC

890n

880n

881n

+9

823n

+67

MARKET STAYS IN A HOLDING PATTERN!

Showfloor talk of a slightly dearer market was spot on as the market managed to claw back some of the previous fortnight’s losses. The firming market in Melbourne last Thursday indicated that a bit of renewed activity and enquiry was forthcoming. The reduced national catalogue by 8,000 bales (to 41,850) played into growers’ hands with the stronger A$ not adversely impacting on buyers purchasing strategies as the FRX rose by 2/3rds of a cent to 77.90 and climbing above 78 cents briefly on Wednesday night. By the numbers, the AWEX EMI added 9 cents to 1315 and 15 cents to 1023 in US$ terms. The gains for merino fleece types was even from super-fine to medium microns, 25 to 35 cents across the board. Low VM (< 2.5%) skirtings led the price recovery in Room 2 as they finished 20/40 cents higher with all other types unchanged for the week. Cardings also recovered some losses from the 2 previous series as all types were up to 20 cents to the good bar some burry LKS in the 18/19 micron range that lost 10 to 20 cents. The crossbred was erratic but the majority of types continued on their worsening trend. Lower style lots fell by another 20 to 40 cents with the odd well-prepared lot, regardless of type, exceeding valuations, in some cases by 50/100 cents making it almost impossible to value and predict with some types either totally neglected or making well above the valuation. On our day 35% of the crossbred offering was passed-in. The overall pass-in rate fell to 10%.

The continuing smaller volume of FNF (< 1% VM) fleece types saw these wools come under the most pressure and benefited from the rising market more than the higher VM lots. Fleece wool in Fremantle in some cases outperformed their Eastern states counterparts because they are offering more of these types with the good seasonal conditions here putting more VM into this year’s clip on the east coast. For 19.5 to 18 micron the MPGs in Fremantle are just ahead of the prices in Sydney and Melbourne. Chinese top-makers and indent buyers dominated all buying lists with good support from local traders and the largest European top-maker who looks to be ramping up their buying patterns with 2 exporters commenting that enquiry from Europe is on the increase.

Although auction volumes are higher than in past years the absence of South African wool sales and Fremantle going into fortnightly sales in June will keep a lid on quantity overload for the short term. The recent spike in prices was due to some uniform orders being executed by the Chinese government with more to come but the timing still an unknown. Chinese retailers are reporting a surge in consumption of Merino and Merino blend garments but many mills are still keen to export tops or early stage semi-processed garments to their long standing offshore clients. When this ramps up to pre Covid-19 levels is the million $ question. 46,000 bales are on offer next week, no change we hope!

Southern Aurora Fwd Prices

Micron

Date

Low

21

Sept. 21

1260

Main Buyers (This Week)

1

Techwool

5441

2

Endeavour Wool

3440

3

Fox & Lillie

2973

4

Tianyu Wool

2594

5

United Wool

2347

6

Lempriere

2329

Eastern Market Indicators (AUD cents/kg clean)

1315 cents ê  9 cents compared with 14/04/2021

Northern Market Indicators (AUD cents/kg clean)

1393 cents ê 16 cents compared with 14/04/2021

   AUD/USD Currency Exchange

0.7783 ê 0.0061 compared with 14/04/2021

14 May 2021

Friday, May 14, 2021

 WEEKLY MARKET REPORT

Week Ending 14th May, 2021

 AWEX Northern Micron Indices Comparison

AWEX INDEX

This Week

S46/20

This Week

M46/20

Last Sale

S45/20

Sydney

Change

Last Year

Sydney

Sydney Yearly

Change

17

2258

2270 2268
-10 1683 +575

18

1896

1896

1913

-17

1517

+379

19

1592

1592

1597

-5

1391

+201

20

1339

1346

1344

-5

1332

+7
21 1274n 1266 1277n -3 1305n -31
 26 - 755n 783 (M) -8 (M) 770n (S) -

28

459n

471

499n

-40

576 (M)

-105 (M)

MC

881n

889n

901n

-20

795n

+86

MARKET STAYS ABOVE 1300 - JUST!

The market didn’t pass the test of too much volume this sale as more losses were recorded. The weight of an anticipated 54,700 bales was a bridge too far for exporters but the market fell less than the expected losses that were widely predicted. Over the past fortnight the AWEX EMI has retreated by 36 cents after the previous 2 sales saw a combined jump of 51 cents. The EMI still sits above 1300 cents at 1306 and at 1008 in US$ terms after falling by 11 cents. This series’ losses were more subtle than severe for the merino fleece types, 18.5 micron and coarser giving back up to 10 cents along with 17s while 17.5/18 fell by 15 to 30 cents with the superfine microns in sellers’ favour. Low VM(< 3%) skirtings looked solid by week’s end with lower types that had higher VM,  cott and colour off the pace by 10 to 20 cents. Cardings continued on their downward run from last week to have all types give back 10 to 30 cents as the 2 East Coast MCIs lost 20 cents to fall below 900. Crossbreds also cheapened up this sale to the tune of 10 to 40 cents depending on micron and centre. Despite the market slightly cheaper, the pass-in rate fell by 3% to 12% as the FRX stayed relatively stable at 77.20 cents from late last week but was peaking at 78.50 early in the week as sales were being held then fell 2% on Wednesday night.

The volume movements of this week’s catalogue were certainly a talking point on the showfloor. After a 40% increase by last Friday from the week before then a drop of 2400 bales by Monday to 52,000 then the usual withdrawal rate of between 5 and 8% this left 49,000 to be offered and, with 13% passed in, just 43,600 bales actually sold to give us a 21% difference in predicted offering to what was actually sold. Why the Chinese have to get into a panic when big volumes are forecast then never come to fruition is one of the great mysteries of the wool trade!! This coming sale’s national catalogue is 46,000 bales so it will be highly likely that the sold figure by this time next week won’t reach 40,000 with most experts predicting a solid to slightly dearer market.

Even though demand is fickle at the moment the market is faring well despite the unusually high weekly offerings at this time of the year with financial restraints still well in play with the ongoing logistical problems and the profile of the selection becoming difficult to place in some orders. With most growers benefitting from a good season, this has pushed microns out by 1 to 1.5 microns broader but lifted yields by 10 to 15%, while the % of VM has and will continue to rise as we go into winter and, with the market over 50% better than the low point of 858 in September, there are still some drought-affected wools still making their way into the market which is proving difficult to place in some orders.

Southern Aurora Fwd Prices

Micron

Date

Low

21

sept. 21

1260

Main Buyers (This Week)

1

Techwool

6141

2

Endeavour Wool

3889

3

Tianyu Wool

3561

4

Fox & Lillie

3490

5

Aust. Merino

2649

6

Kathaytex

2491

Eastern Market Indicators (AUD cents/kg clean)

1306 cents ê 13 cents compared with 07/04/2021

Northern Market Indicators (AUD cents/kg clean)

1377 cents ê 16 cents compared with 07/04/2021

   AUD/USD Currency Exchange

0.7722 ê 0.0005 compared with 07/04/2021

7 May 2021

Friday, May 07, 2021

WEEKLY MARKET REPORT

Week Ending 7th May, 2021

 AWEX Northern Micron Indices Comparison

AWEX INDEX

This Week

S45/20

This Week

M45/20

Last Sale

S44/20

Sydney

Change

Last Year

Sydney

Sydney Yearly

Change

17

2268

2278 2304
-36 1657 +611

18

1913

1920

1948

-35

1488

+425

19

1597

1598

1637

-40

1353

+244

20

1344

1357

1365

-21

1303

+41
21 1277n 1283 1277n 0 1278n -1
 26 - 763 793 (M) -30 (M) 846n (M) -73 (M)

28

499n

501

515n

-16

611n

-112

MC

901n

911n

922n

-21

796n

+105

MARKET TO HOLD ABOVE 1300??

The good fortnight the market had with a combined 51 cent gain came to a sudden stop this week with a 23 cent retreat in the AWEX EMI to 1319. With 48,000 bales on offer and plenty of enquiry, all the showfloor talk was for a very solid to dearer market but by Monday afternoon it was evident that sentiment had changed as forecast rostered volumes for next week’s sale ballooned from 38,600 to 54,700 in a week, an increase of 41% with estimates for the following sale expanding by 22% (32,700 to 40,155). It would seem that early figures released for these 2 sales were grossly underestimated in the first instance giving buyers and exporters a false reading of up and coming volumes. Added to this was the extra volume of wool put into the next few sales as the market rose. Some of this wool was harder to place with higher VM and low yielding types held over from the drought. These wools were cheaper from the get-go and dragged the market lower.

As we stated earlier, the market shed 23 cents to 1319 with a similar fall of 26 cents in US$ terms to 1019. The fall in the FRX to 77.25 (0.65) was not enough to stave off the falling market. All fleece microns suffered falls (bar 21s and broader) ranging from 20 to 40 cents as all types came under pressure. Skirtings fell by similar amounts, 20/40 cents with low VM types (< 2%) with good AM results quoted about 10 to 20 cents back. Cardings recorded similar falls to their combing counterparts of 20 to 30 cents with low VM types less affected. All centres’ MCIs still remain above 900 averaging 912 cents. Crossbreds also lost ground to see most microns (26 to 32) give back 15 to 30 cents. The pass-in rate more than doubled to 15% up by 9% on the previous sale.

Apart from sentiment and quantity variation influencing the market, logistical problems and buyer finances are still at the forefront of exporters’ dramas. Their ability to plan buying strategies and put those plans into action week to week is somewhat of a guessing game as wool deliveries are still 2/4 weeks delayed into China and more to other destinations. The market has performed well and absorbed the larger volume on offer this season, over 104,000 extra bales offered to the trade when compared to the previous season with a market basically rising as demand picks up as the effects of Covid-19 slowly dissipate around the world. The latest testing figures released by AWTA make for some interesting reading. April figures show a 19% increase compared to April, 2020. Total weight tested season to date is up by 1% which equates to 264mkg tested compared to 261mkg last season due mainly to heavier wool cuts per sheep as a result of the better season and higher lambing % from last year. The largest offering since the opening sale of the year (54,700 bales) will test the market next week.

Southern Aurora Fwd Prices

Micron

Date

Low

21

sept. 21

1240

Main Buyers (This Week)

1

Techwool

5146

2

Endeavour wool

3977

3

Tianyu Wool

3952

4

Fox & Lillie

2970

5

Modiano

2139

6

Aust. Merino

2121

Eastern Market Indicators (AUD cents/kg clean)

1319 cents ê  23 cents compared with 30/04/2021

Northern Market Indicators (AUD cents/kg clean)

1393 cents ê 28 cents compared with 30/04/2021

   AUD/USD Currency Exchange

0.7727 ê 0.0062 compared with 30/04/2021