Weekly Market Reports


16 July, 2021

Friday, July 16, 2021

WEEKLY MARKET REPORT

Week Ending 16th July, 2021

 AWEX Northern Micron Indices Comparison

AWEX INDEX

This Week

S02/21

This Week

M02/21

Last Sale

S01/21

Sydney

Change

Last Year

Sydney

Sydney Yearly

Change

17

2538

2503n 2536
+2 1638 +900

18

2129

2130

2115

+14

1428

+701

19

1768

1770

1748

+20

1279

+489

20

1438

1446

1427

+11

1229

+209
21 1342 1324 1312 +30 1228n +114
 26 - 811n - - - -

28

530n

514

470n

+60

574n

-44

MC

948n

968n

959n

-11

801n

+147

A GOOD SOLID FINISH TO WOOL SALES!!

The market managed to keep its head above water defying a potential drop in values due to excessive quantities. A dearer opening session led to the final day’s drifting market, wrapping up sales before the annual 3 week Winter recess. The 1st 2 sales of the season have seen a plethora of wool being offered with 100,200 bales compared to just 66,000 in last year’s 2 corresponding sales - an increase of 51%. The market has managed to absorb this extra volume as the net result for the 2 July sales has seen a 5 cent rise for the AWEX EMI. The FRX’s favourable adjustment and no wool sales worldwide for the next 3 weeks saw buyers trying to fill outstanding orders and get as much wool as possible on the water. The EMI rose 8 cents to 1428 as finer microns (< 17) were firm in Sydney but fell by 45 to 85 cents in Melbourne, while all others ranged from 10 to 30 cents better. Skirtings had a good series with the low VM types < 2.5% gaining 20 to 25 cents with burrier lots just in buyers’ favour. Cardings were the only sector to lose ground as types above 3% VM gave up 20 to 40 cents while all others were fully firm for the sale. The MCI lost 11 cents and is now sitting at 948. Crossbreds regained last sale’s losses as most microns added 25 to 60 cents to last week’s prices. The FRX stayed at 74.6 cents all week with the pass-in rate at 13%. In US$ terms the market rose by 6 cents to 1066.  

China topped all sector’s buying lists with good and increasing support from the other major wool destinations - Italy, India and Czech Republic. Local traders were keen to secure volume with Chinese indent and top-makers active. Europe’s largest top-maker flexed their muscle to push XBs higher purchasing 32% of the offering.

European yarn and fabric fairs have recently been held with Italian processors given a chance to collaborate with customers and work on buying strategies for the next 6 to 12 months. As the table above illustrates, 19 micron and finer have staged a remarkable recovery over the past 12 months. The trade is very comfortable with these types of wools that command premiums lingering at the present price levels, having been missing for 18 months. One big theme that arose from the Pitti Filati Yarn and Idea Beilla Yarn fairs was “sustainability” - something that will become more and more critical into the future. Another buzzword is “Blockchain” which will be intensely discussed at future conferences and exhibitions for the fashion industry. This facilitates the transfer of data rather than maintaining a central repository ensuring no one can modify or manipulate anything along the wool production pipeline to suit their own requirements. Blockchain systems will make processors more efficient and transparent while highlighting ethical and sustainable practices. Sales recommence on Tuesday, 10th August.


Southern Aurora Fwd Prices

Micron

Date

Low

21

Oct. 21

1320

Main Buyers (This Week)

1

Techwool

6548

2

Fox & Lillie

4425

3

Tianyu Wool

3995

4

PJ Morris

3516

5

Endeavour Wool

3437

6

Modiano Aust.

2457


Eastern Market Indicators (AUD cents/kg clean)

1428 cents é 8 cents compared with 09/07/2021

Northern Market Indicators (AUD cents/kg clean)

1522 cents é 12 cents compared with 09/07/2021

   AUD/USD Currency Exchange

0.7463 è 0.0000 compared with 09/07/2021


9 July 2021

Friday, July 09, 2021

 WEEKLY MARKET REPORT

Week Ending 9th July, 2021

 AWEX Northern Micron Indices Comparison

AWEX INDEX

This Week

S01/21

This Week

M01/21

Last Sale

S53/20

Sydney

Change

Last Year

Sydney

Sydney Yearly

Change

17

2536

2546n 2545
-9 1586 +950

18

2115

2131

2143

-28

1408

+707

19

1748

1761

1738

+10

1284

+464

20

1427

1440

1438

-11

1221

+206
21 1312 1325 1302n +10 1200n +112
 26 - - - - 810n -

28

470n

473

490n

-20

564 (M)

-91 (M)

MC

959n

957n

965n

-6

826n

+133

NOT AS BAD AS EXPECTED!!

Even though the market opened the new season on a cheaper note (that was widely anticipated by buyers) the AWEX EMI did manage to stay above the 1400 cent mark. Results in the 3 centres were markedly different as Sydney fell by 12 cents and Melbourne and Fremantle recorded 2 cent gains. The softer start to the series was turned around by the end of selling in Melbourne on Thursday (in isolation) with all Merino MPGs averaging 20 cents better in Melbourne than Sydney by the close of the market which augers well for next week. In the final washup the EMI lost just 3 cents to 1420 with 17s and finer, 18.5 and 19.5/20s falling by 5/10 cents. A fall of 25 cents was the result for 17.5/18 micron while 19 and 21s added 10 cents. After initial losses in the opening session skirtings recovered to finish the sale in buyers’ favour bar some high VM types with poor AM readings to be 20 to 30 cents off the pace. Cardings followed a similar pattern to their combing counterparts to end the series in buyers’ favour with the XB selection 15 to 30 cents cheaper across the board.

The sharp rise in the FRX on Monday night (to 76.5 cents) sent the market south in the opening session on the East Coast but, by the time Fremantle finished selling, a change in sentiment had come to see consolidation on Wednesday and a dearer market to end the week. The big initial offering of 56,000 then 53,000 bales didn’t frighten buyers away as first thought with an expected fall of 20 to 50 cents for most fleece types never eventuating. Many fabric and garment makers had been questioning the rises over the past 6/8 weeks when there were no signs of increased consumption in the Northern Hemisphere and nervous about whether consumers would take up the slack in their up-and-coming autumn. It looks as though early stage processors got a little over excited and pushed prices beyond the comfort level of their downstream users when retail demand had not increased. This time of year can often see large volumes of wool hitting the market (start/end of financial year) with some brokers absolute disregard for orderly marketing, this week’s sale being the biggest so far this year and next week identical (51,300 bales) adding up to 64% more wool offered than the 2 corresponding sales last year at 66,100 bales. Buyers will be mindful of the up and coming 3 week recess here and the 6 week recess in South Africa (currently under way) and no sales in New Zealand, there will be no access to wool sales anywhere in the world till early August. Hopefully this recess will give them a chance to deliver wool to mills and open letters of credit to allow funding for when sales start again. Showfloor chatter is for a solid to dearer market.

Southern Aurora Fwd Prices

Micron

Date

Low

21

Oct. 21

1320

Main Buyers (This Week)

1

Techwool

7608

2

Tianyu Wool

4656

3

Endeavour Wool

4070

4

Fox & Lillie

3920

5

PJ Morris

3745

6

Aust. Merino

2466

Eastern Market Indicators (AUD cents/kg clean)

1420 cents ê 3 cents compared with 02/07/2021

Northern Market Indicators (AUD cents/kg clean)

1510 cents ê 12 cents compared with 02/07/2021

   AUD/USD Currency Exchange

0.7463 ê 0.0059 compared with 02/07/2021

2 July 2021

Friday, July 02, 2021

 WEEKLY MARKET REPORT

Week Ending 2nd July, 2021

 AWEX Northern Micron Indices Comparison

AWEX INDEX

This Week

S53/20

This Week

M53/20

Last Sale

S52/20

Sydney

Change

Last Year

Sydney

Sydney Yearly

Change

17

2545

2578 2623
-78 1586 +959

18

2143

2163

2203

-60

1408

+735

19

1738

1758

1820

-82

1284

+454

20

1438

1423

1510

-72

1221

+217
21 1302n 1289 1380n -78 1200n +102
 26 - 795 798 (M) -3 (M) 816 (M) -21 (M)

28

490n

500

509n

-19

564 (M)

-64 (M)

MC

965n

955n

978n

-13

801n

+164

A RECOVERY SEASON ENDS ON A SOFT NOTE!!

As we forecast in last week’s report, the market may have reached its “Everest” for the moment. The slightly cheaper tone in the final session was a precursor for this series. The ongoing shipping delays that are tying up vital finances and predicted Sale 01 volumes of 55,000 bales (the largest sale since March, 2020, after the wool industry software provider was hacked forcing a cancelled sale) was enough to firmly put the brakes on the rising market for the time being. The AWEX EMI gave back 45 cents (3.07%) to 1423. The losses were similar in US$ terms, 38 cents (3.41%) to 1070 as the FRX finished fractionally lower at 75.2 cents. No sector of the market was immune from the cheaper trend as Merino fleece types fell 55 to 85 cents. Skirtings gave back 25 to 40 cents with the low VM (< 2.5%) with good specs less affected. The 3 centres’ carding markets had 3 different results: Sydney lost 13 cents, Melbourne was in sellers’ favour and Fremantle adding 30 cents to see all 3 MCIs averaging 965 cents. Crossbreds also lost ground by 10 to 20 cents for most types. The pass-in rate climbed to 21% but for the season was 5.4% lower than the previous season at 11%

It was a disappointing way to finish the season but a look at the numbers over the past year paint a picture of recovery that no-one would’ve predicted from what was a dire situation due to the pandemic. The market is 27.5% higher than 12 months ago - 1423 to 1116 with the low point of 858 in early September - the EMI now 60% higher than the low point. The market is 300 cents (38%) better in US$ terms and the FRX stronger by 6 cents. As the table above illustrates, all but XBs are higher than last year, especially < 19 micron with superfine wools at 2 year highs. There were 311,000 bales extra offered this season (1,782million) up by 21% with the $ amount at $2,246.72 million, up by $274million. The top price for the year was 4,900 cents for a 12.8 micron fleece bale sold in May. China completely dominated the market to purchase over 80% of the clip as India and Europe continue to build up their processing capacity but are not operating anywhere near full capacity yet. With vaccinations well on track in the northern hemisphere it is hoped by the end of 2021/early 2022 lockdowns and restrictions will be a thing of the past with all facets of life back close to normal and consumers spending money on woolen apparel to further enhance the farmgate price for wool. Next week is the opening sale of the new season with 55,000 bales rostered and exporters struggling to find enough enquiry and finance to buy at the current level. An EMI that can stay above 1400 will be a good result by this time next week.

Southern Aurora Fwd Prices

Micron

Date

Low

21

Oct. 21

1300

Main Buyers (This Week)

1

Techwool

4612

2

Fox & Lillie

3488

3

PJ Morris

2361

4

Endeavour Wool

2252

5

Tianyu Wool

2243

6

United Wool

2097

Eastern Market Indicators (AUD cents/kg clean)

1423 cents ê 45 cents compared with 25/06/2021

Northern Market Indicators (AUD cents/kg clean)

1522 cents ê 42 cents compared with 25/06/2021

   AUD/USD Currency Exchange

0.7522 ê 0.0024 compared with 25/06/2021