Weekly Market Reports


25 June 2021

Friday, June 25, 2021

 WEEKLY MARKET REPORT

Week Ending 25th June, 2021

 AWEX Northern Micron Indices Comparison

AWEX INDEX

This Week

S52/20

This Week

M52/20

Last Sale

S51/20

Sydney

Change

Last Year

Sydney

Sydney Yearly

Change

17

2623

2606n 2568
+55 1592 +1031

18

2203

2198

2169

+34

1401

+802

19

1820

1819

1810

+10

1276

`+544

20

1510

1488

1500

+10

1212

+183
21 1380n 1379 1356n +24 1197n +183
 26 - 798n 765 (M) +33 (M) 795n (M) +3 (M)

28

509n

521

493n

+16

551 (M)

-30 (M)

MC

978n

951n

976n

+2

814n

+164

HAS THE MARKET PEAKED??

The wool market had another positive series to see the AWEX EMI post a 20 cent gain to 1468. This most likely could be the peak as the market did in fact lose 4 cents in the final session from its high point of 1472 cents on the opening day. Showfloor talk amongst the buyers that the top of the market was close was spot on as another frantic start to sales was tempered by the close and the second day saw losses of 5/10 cents for 18.5 to 20 micron whereas 17 and finer still added to their values. By week’s end 18.5 to 22 micron rose by 10 to 25 cents with finer types 35 to 70 cents better with some lots over 100 cents higher. Once again the clearance rate for fleece types was high at 98.4% with just 124 bales not sold. Skirtings enjoyed another good sale as increases of 20 to 40 cents was common for all types in this sector with no hint of a softer tone on the final day. After 5 weeks of rises (totaling 95 cents) the carding sector was just in sellers’ favour to add 2 cents to 978 as the opening day’s gains were barely maintained in the final session. Crossbreds kept pace with their merino counterparts with all microns adding 10 to 30 cents. As mentioned earlier, the EMI gained 20 cents to 1468 and in US$ terms just a 4 cent rise to 1108 due to the FRX rising on Tuesday night but week to week was 0.75% lower with the A$ low point at 74.85 over the weekend with some exporters saying if the FRX didn’t fall the EMI could’ve fallen by 10/20 cents.

With just the 2 East Coast centres operating, this presented the smallest national catalogue since October (33,300). This small volume coupled with the FRX rates favouring exporters was an opportunity for the market to keep forging ahead as it had done for the past 7 sale days (adding 130 cents) but buyers were indicating the market had run out of steam. Shipping issues continue to delay wool on the water and at port thus tying up critical finance to keep buyers purchasing wool. Finances have been stretched for some time with unusually large offerings for winter, financial strain is something buyers have become accustomed to lately. With 3 sales before the winter recess, buyers and their bank accounts are looking forward to the break to replenish themselves and hopefully top up their money pits!

Buying honours were evenly spread amongst topmakers, manufacturers and local traders with the softer FRX helping overseas users in dealing with a similar price in their local currency. Next week sees the final sale of the season with all 3 centres in action with a catalogue of 44,400 bales on offer. Buyers are predicting some sort of price correction to continue on from the final day this week but, to what extent is still unknown. FRX movements will be critical in determining how the market will fare.

Southern Aurora Fwd Prices

Micron

Date

Low

21

Oct. 21

1300

Main Buyers (This Week)

1

Techwool

5033

2

Fox & Lillie

3732

3

Endeavour Wool

2701

4

Tianyu Wool

2313

5

Modiano

2009

6

Lempriere

1860

Eastern Market Indicators (AUD cents/kg clean)

1468 cents é 20 cents compared with 18/06/2021

Northern Market Indicators (AUD cents/kg clean)

1564 cents é 21 cents compared with 18/06/2021

   AUD/USD Currency Exchange

0.7546 ê 0.0074 compared with 18/06/2021

18 June 2021

Friday, June 18, 2021

 WEEKLY MARKET REPORT

Week Ending 18th June, 2021

 AWEX Northern Micron Indices Comparison

AWEX INDEX

This Week

S51/20

This Week

M51/20

Last Sale

S50/20

Sydney

Change

Last Year

Sydney

Sydney Yearly

Change

17

2568

2589n 2488
+80 1613 +955

18

2169

2184

2074

+95

1438

+731

19

1810

1799

1734

+76

1314

+496

20

1500

1489

1423

+77

1243n

+257
21 1356n 1374 1311 +45 1229n +127
 26 - 765 740 (M) +25 (M) 815n (M) -50 (M)

28

493n

498

483n

+10

589 (M)

-91 (M)

MC

976n

946n

954n

+22

858n

+118

1400 DONE AND DUSTED!!!

For the second series running the AWEX EMI added 50+ cents to its value. This has the market on a 5 week ascendency that has seen it climb by 142 cents, 74% (105 cents) of that over the past 2 sales to smash through the 1400 cent mark. It has been a rapid rise from when the market was seemingly stuck between 1300 and 1350 for 7 weeks in April/May. The EMI now sits at 1448 up by 55 cents. In US$ terms the market rose by 25 cents to 1103 as the FRX dropped sharply on Wednesday night to 76.2 cents, back by 1.2%. Increases were across the full spectrum of MPGs: 20 micron and finer recorded rises of 70 to 95 cents with 21s and coarser up to 45 cents dearer as just 89 bales (1.2%) of fleece were passed-in in Sydney. Skirtings saw good gains but not to the extent of their fleece counterparts - all types and descriptions 30/50 cents to the good. The call for more knitwear which continues to dominate the fashion scene saw cardings ascend about the same level as last series with the 3 centres averaging a 26 cent rise as all types in this sector looked to be 20 to 50 cents higher - the MCIs across the 3 centres now at 956 cents. Crossbreds saw some good gains as 26s and 32 micron lifted by 25 cents with 28/30s in sellers’ favour.  Surprisingly the pass-in rate was a fraction higher at 4.6%.

The extra volume of 6,200 bales to 42,500 as Fremantle joined in didn’t dampen exporters appetite for more wool. Some buyers would be happy to take the ‘sit and wait’ approach while others are keen to secure wool for the longer term (late into the year) albeit at just below prompt market prices. There are always buyers that are cautious about pushing the market to “unsustainable levels” but, in the current environment, that looks unlikely as the processing season is historically in full swing. Chinese garment makers are missing the usual lead from European fashion designers and unsure about what colours and styles to proceed with for the up and coming season. Their processing capacity is sitting at about 70% due to a shortage of textile workers leading to the ongoing production and shipping delays that are frustrating retailers and consumers globally. Processors in Europe are busy when compared to last year but, like China, nowhere near full production capacity as their first enquiry is about delivery time then price. Spinners and knitters on the continent are busy with more and more weavers dusting off their idle looms at long last. The northern hemisphere selling season for woolen garments will start in September with consumer confidence and addressing sustainability concerns at the forefront of purchase patterns of consumers when buying discretionary items such as woolen apparel. Fremantle sit out next week’s sale with just 34,600 bales on offer on the East Coast with no talk of the market having a correction yet.

Southern Aurora Fwd Prices

Micron

Date

Low

21

Sept. 21

1270

Main Buyers (This Week)

1

Techwool

6451

2

Tianyu Wool

4071

3

Endeavour Wool

4017

4

Fox & Lillie

3854

5

PJ Morris Wool

2381

6

United Wool

2183

Eastern Market Indicators (AUD cents/kg clean)

1448 cents é 55 cents compared with 11/06/2021

Northern Market Indicators (AUD cents/kg clean)

1543 cents é 56 cents compared with 11/06/2021

   AUD/USD Currency Exchange

0.7620 ê 0.0119 compared with 11/06/2021

11 January 2021

Friday, June 11, 2021

WEEKLY MARKET REPORT

Week Ending 11th June, 2021

 AWEX Northern Micron Indices Comparison

AWEX INDEX

This Week

S50/20

This Week

M50/20

Last Sale

S49/20

Sydney

Change

Last Year

Sydney

Sydney Yearly

Change

17

2488

2492 2388
+100 1624 +864

18

2074

2083

2001

+73

1473

+601

19

1734

1731

1682

+52

1360

+374

20

1423

1419

1349

+74

1286

+137
21 1311 1296 1264n +47 1268n +43
 26 - 740n 733 (M) +7 (M) 833n (M) -93 (M)

28

483n

489

453n

+30

874n

-141

MC

954n

929n

925n

+29

874n

+80

CLOSING IN ON 1400!!

The impetus that the wool market has experienced over the past few sales kept going this series to have the AWEX EMI closing in on the 1400 cent mark (1393).  With the good rises comes many questions: Is underlying demand on the increase as northern hemisphere demand ramps up and consumers have more freedom to move around and spend money? Have finer wools peaked? When will the XB market improve and can the extra supply be absorbed by the market? The AWEX EMI added 50 cents (3.7%) to its value to go to 1393, the biggest weekly gain since January and a level not seen since March 2020. The jump was almost as good in US$ terms with a 38 cent lift to 1078 as the FRX was again stable at 77.40 cents. All 4 sectors of the market (Merino FLC, Skirtings, Oddments and Crossbreds) rose for the first time since January. The national pass-in rate fell to just 4%. The largest gains were in the superfine and broader MPGs (< 18 and 19.5/20 micron) rising by 70 to 100 cents with all other microns 45 to 65 cents better as just 95 bales of fleece wool were not sold in Sydney to clear 98.7%. Skirtings also gained some good traction as emphasis on < 18 micron with < 2.5% VM lifted by 30 to 80 cents with all other types increasing by 40 to 60 cents. Cardings saw double digit gains as both centres’ MCIs leapt by 28 cents with all types in this sector jumping by 20 to 70 cents. The crossbred sector saw its biggest gains since late February with rises of 20 to 30 cents.

Pressure looked to be on buyers and exporters from the opening lot as the quantity reduced to 36,300 bales - the smallest weekly selection since late November, 2020, with just the 2 East Coast centres operating. Bidding was fierce on almost all types as lack of volume and enquiry lifting resulted in the market only going one way with Chinese indent orders and local exporters selling to Chinese mills leading to the ascendency in prices. In a positive for the XB market Europe’s largest topmaker dominated this sector. The current level of 1078 in US$ terms is the first time since the pandemic sent the market into a downward spiral that we are at pre Covid-19 levels (January 2020). The values are as good as any time in the past 2 years with only 5 weeks since July 2019 having been higher than this series’ point.

It may be convenient (and a little simplistic) to point out the Covid-19 vaccination rates in the USA compared to other markets and suggest getting people back into wearing woolen suits may be linked. There is a big drive by leaders and mayors of most US cities to entice people back to their CBDs and shop there for all types of products including clothing which would be welcome news for worsted fabric manufacturers. It would be encouraging to see this directive happen across cities in Europe and Britain with lockdown restrictions hopefully to be lifted towards the end of June. Fremantle comes back onto the selling roster next week to push the national catalogue to 45,000 bales.

Southern Aurora Fwd Prices

Micron

Date

Low

21

Sept. 21

1270

Main Buyers (This Week)

1

Techwool

4108

2

Fox & Lillie

4074

3

Endeavour Wool

3717

4

Tianyu Wool

2779

5

Kathaytex

2611

6

United Wool

2186

Eastern Market Indicators (AUD cents/kg clean)

1393 cents é 50 cents compared with 04/06/2021

Northern Market Indicators (AUD cents/kg clean)

1487 cents é 57 cents compared with 04/06/2021

   AUD/USD Currency Exchange

0.7739 ê 0.0003 compared with 04/06/2021

4 June 2021

Friday, June 04, 2021

 WEEKLY MARKET REPORT

Week Ending 4th June, 2021

 AWEX Northern Micron Indices Comparison

AWEX INDEX

This Week

S49/20

This Week

M49/20

Last Sale

S48/20

Sydney

Change

Last Year

Sydney

Sydney Yearly

Change

17

2388

2408 2330
+58 1659 +729

18

2001

1995

1965

+36

1504

+497

19

1682

1667

1640

+42

1389

+293

20

1349

1349

1350

-1

1318

+31
21 1264n 1254 1269n -5 1298n -34
 26 718n 733n 729 (M) +4 (M) 823n (M) -90 (M)

28

453n

470

448n

+15

615n

-162

MC

925n

901n

913n

+22

884n

+41

HIGHEST POINT OF THE YEAR!

The market kept up its momentum for the third sale in a row as most types across nearly all MPGs added to their values. The only negative movements were in the 20/21 micron fleece types in Sydney which finished in buyers’ favour due to higher levels of VM in these wools. After a few weeks of single figure gains the AWEX EMI rose by 23 cents to 1343 eclipsing the 1342 cent mark of late April to sit at its highest point this year. The gain was just as impressive in US$ terms with an 18 cent lift to 1040 as the FRX barely moved for the week to stay at 77.5 cents. 19.5 micron and finer gained 20 to 60 cents with 20s and coarser in buyers’ favour by up to 5 cents. It was noticeable that discounts for tender, low yield and high mid-break lots were reduced as buyers scrambled for the so-called “cheaper lots”. Growers were quite happy with the ascendency in prices as just 72 bales of fleece were passed-in in Sydney.  Skirtings had even more impressive rises with < 18 micron under 2.5% VM jumping by 60 to 80 cents with broader types to 19 micron 20/30 cents higher with all other broader and burrier types solid to sellers’ favour. Cardings kept the rising momentum going with gains across the board in this sector to the tune of 40 to 60 cents. All 3 centres’ MCIs are now back above 900 cents to average 911. After 4 weeks of losses in a row, crossbreds also finished in the positive with most types up by 5 to 15 cents. The pass-in rate fell to 7.4% - the highest clearance rate for 5 weeks.

Finer microns (< 19.5) are enjoying their day in the sun at the moment. With less volume of these types and lower cashmere supply in Mongolia and Iran and supply chain disruptions much of the high quality knitwear for the up and coming season will contain more merino than cashmere - a good outcome for fine wool growers with wool to sell over the next few months. As each week goes by more enquiry is coming from Japan, India and Europe putting more competition into the market. Medium wools (20/22 micron), however, are struggling to keep up with their finer micron counterparts’ gains with VM over 2% being punished unfairly as this is not high level VM nor difficult to process compared to FNF wools or types up to 2%. Many mills in China will not sway from their generic government types that specify 1.8% VM. The mills that buy outside these specs can virtually pick and choose what they want to buy at great value. There has been new business written for medium merino types so, hopefully, this can benefit the 20 micron and broader market. Topmakers from China and Europe took on the local traders to try to build up some inventory with big manufacturers keen to secure quantity as supply throughout June should average mid to high 30,000s as Fremantle do not sell next week or in sale 52.  All the showfloor talk is for a very solid market with 38,600 bales on offer on the East Coast.

Southern Aurora Fwd Prices

Micron

Date

Low

21

Sept. 21

1250

Main Buyers (This Week)

1

Techwool

5641

2

Fox & Lillie

4082

3

Endeavour Wool

3640

4

Tianyu Wool

3046

5

United Wool

1914

6

PJ Morris

1843

Eastern Market Indicators (AUD cents/kg clean)

1343 cents é 23 cents compared with 28/04/2021

Northern Market Indicators (AUD cents/kg clean)

1430 cents é 28 cents compared with 28/04/2021

   AUD/USD Currency Exchange

0.7742 ê 0.0000 compared with 28/04/2021