EASTERN AUSTRALIAN MARKET REPORT

Market positive but difficult to compare with the volatility of last week and Melbourne selling in isolation.

COMMENT

Most descriptions were a little dearer than the close of Fremantle but around 1 to 2% easier than Melbourne. Sydney didn’t sell last Thursday.

FLEECE

Compared to Melbourne

Best 18.0 and finer fully firm

All others 1 to 2% easier

SKIRTINGS

1 to 2% easier compared to Melbourne.

OPEN TOP

Nominally 1% easier.

Woolly warm welcome to our new staff members

All in on sustainability

The Schneider Group creates a Group-wide Sustainability Manager position

Willy Gallia - Sustainability Manager

Starting September 2019, Willy Gallia has joined the Schneider Group team as the Sustainability Manager. This newly created position is part of a wider Group strategy to push wool as a sustainable fibre while also continuously improving the existing supply chain from farm to top.

Giovanni Schneider explains: “Over the past couple of years we have invested into several key steps to offer our clients sustainable and traceable wool top. We are now seeing traction in demand for our sustainable approach, which made it the right moment to focus all of our efforts in the hiring of a Sustainability Manager.”

Part of the Schneider Group sustainability investment is the set up of the Authentico Integrity Scheme for wool in Australia and New Zealand as well as cashmere in Mongolia. Furthermore the company runs its own Organic and RWS certified sheep farms in Patagonia. With these two sourcing models, the company can ensure full traceability back to the farm.

Willy Gallia has been working for the Schneider Group since 2006 and brings relevant experience from his previous position as Commercial & Sustainability Manager at Fuhrmann Argentina, part of the Schneider Group based in Trelew. Together with the Fuhrmann team, Willy oversaw the alignment of the farm management, processing mill and commercial sector with the overall vision obtaining organic wool certification and Responsible Wool Standard. Just recently, Willy conducted a Life Cycle Assessment for the Fuhrmann Argentina operation and offset the emissions to offer the first carbon-neutral wool tops in the market, a project that will be extended to the whole Schneider Group.

Willy is based in the Verrone office in Biella, Italy and will be looking to work closely with suppliers, customers and third-party organisations to ensure a sustainable and traceable supply chain from farm to product.

Young Talent

Meet our new Junior Trader for the Italian Market

Sara Monteleone

Already some months ago, on 15 April 2019, Sara Monteleone joined The Schneider Group as Junior Trader assisting in servicing all Italian based clients. Sara is being mentored by Claudio Ceria to learn the specifics of the wool trade while also working closely as part of the Trading team with CEO Jeffrey Losekoot and Marco Spina.

Despite not having a wool textile background, Sara became passionate about wool right after touring the Verrone wool combing mill for the first time. ‘I was surprised about the huge world there is behind wool and speciality fibres. When I had my first tour in the mill I was especially impressed by the way the greasy wool arrives and then becomes tops and open tops after the combing process”, Sara remembers her first day at work. Since then Sara has become an expert in giving tours around the mill for visiting clients as it helps her better understand the product she is selling.

As a young person entering the wool trade, Sara is also very much motivated to be working for a company putting an emphasis on sustainability and traceability. Sara concludes that “these are two key points in order to not only be relevant in the global market but especially for saving our planet”.

Sara is yet another young team member joining the Schneider Group. CEO Jeffrey Losekoot explains: “For us, at the Schneider Group, it is important to continue developing our product, our service, and our skills for a sustainable future for wool and with wool. Having young motivated members join our team is an important step in the process and we are happy to welcome Sara Monteleone on board.”

Sara is also based in the Verrone office in Biella and is available to all Italian customers inquiries.

AUSTRALIAN WEEKLY MARKET REPORT

Comment

It was an extraordinary market reversal this week with all prices advancing significantly. It’s difficult to understand the mechanisms that result in such activity. Exporters and processors have been unable trade greasy wool or wool tops for a few weeks. This has resulted in a free fall in market prices. Confusion has been exacerbated by the general global market uncertainty, international trade negotiations, or lack thereof, and prices coming from what was perceived as an historically high level. But we have remained confident in the fact the consumers had not abandoned wool to the extent that you would believe by following the market spiral downwards. What was needed was some confidence at a new level and for growers to reserve their right to withdraw wool from sale or to pass it in when offered a price below their reserve. This is what they did. Eventually the two lines crossed and exporters were unsure of short-term supply amidst more general enquiry across the global wool supply chain. Traders opted not to offer forward and from there it had to react. Even if a customer wanted wool, no one was prepared to sell it. Supply was too limited. Now there are few exporters and traders with any greasy wool stock who are prepared to offer forward. This has resulted in Chinese Topmakers chasing wool at Thursday’s auction ‘at best’ and without giving instruction on price. The perfect storm!

AWEX Eastern Indicator compared with 06/09/2019

Eastern Indicator

Close: 1535

Change in % +12.45

If you want to learn more about AWEX indicators, visit the official website http://www.awex.com.au

Authentico Index Values

15 Micron

Close: 2442

Change in %: -0.12

16 Micron

Close: 2228

Change in %: +0.54

17 Micron

Close: 2085

Change in %: +1.46

18 Micron

Close: 2025

Change in %: +3.69

19 Micron

Close: 1942

Change in %: +12.45

Authentico Indicator

Close: 2117

Change in %: +2.62

Forecast

The Schneider Authentico contracts would have been a good option for growers who have offered wool in the first few months of this season. They are designed to reduce the volatility in price by utilising six- or twelve-month averages as the base and adding premiums for processing and style quality. The perfect method to insure against selling or buying at the extremes seen in recent weeks. They are restricted to clips certified under the Authentico quality scheme who no longer mules and target fine and superfine wool clips only. We think that the critical level of supply will ensure continued market volatility in the short term. It’s hard to know when to buy or sell so all options should be considered. We’ve chosen to follow the market each week, albeit cautiously. There is no better way during these volatile and uncertain times.

Auction offering – current week

Selling Centres for week 11

Market          Sale          Offered             Sold       Passed In

North                    S 11                       5191                           4777                  8.0%

South                   M 11                      9672                           9331                  3.5%

West                     F 11                       4330                          4084                  5.7%

Auction offering – next week

Market          Sale          Sale days          Volume

North                      S 12                        W-T                            8885

South                      M 12                       W-T                           15802

West                        F 12                        W-T                            6420

 

If you want to see the complete Wool Sales Roster click here.

FREMANTLE MARKET REPORT

COMMENT

Fleece generally 100 cents dearer, skirtings 60-70 cent dearer, open tops 50-100 cents dearer.

FLEECE

Fleece prices rose 100 cents across the board today. Prices remained firm throughout the sale, with all types affected.

Fleece had a passed-in rate of 8.2%.

SKIRTINGS

Skirtings were around 60-70 cents dearer.

OPEN TOP

Open tops were generally 50-100 cents dearer on a limited selection.

 

 

EASTERN AUSTRALIAN MARKET REPORT

Market significantly dearer again. Melbourne sold in isolation.

COMMENT

Chinese indent orders dominate.

FLEECE

All Chinese specification fleece types were 5 to 6% dearer with finest most affected. Better Italian types least affected.

SKIRTINGS

All descriptions 4% dearer.

OPEN TOP

Nominally 4 to 5% dearer. Still a little early in the season for good open top lamb types.

NEW ZEALAND MARKET REPORT

Summary

New Zealand market recovers some of it’s losses.

Comment

The New Zealand market weathered the recent ups and downs seen in Australia since the last South Island sale and showed definite signs of recovery.  The merinos generally saw increases averaging 5%, although coarser wools, 18 to 20 micron saw bigger percentage increases.  As has consistently been the case better specified wools continue to attract strong competition.  Coarser wools up to 30 micron showed significant increases between 5-10%.  There was good widespread competition across the catalogues.

FUHRMANN NZ MARKET REPORT

Summary

Market stronger.

Comment

South Island only selling today with 10,000 bales on offer.  The selection consisted of 35% good style/average style crossbred fleece 35.0 to 40.0 micron, 15% good style second shear average 3″, 33.0 to 40.0 micron, 15% good/super style halfbred fleece 23.0 to 30.0 micron, 8% good/super style merino fleece 17.0 to 22.0 micron and 27% associated oddments and miscellaneous types.  Widespread competition with most sectors operating.

Fleece Wools

Good style crossbred fleece 2.5% dearer.

Average style crossbred fleece firm.

16.5 to 23.5 micron 5% dearer.

24.0 to 31.0 micron up 10%

Second Shears

Sellers favour.

Oddments

Better colour up 10%.

Poorer style oddments firm.

Passings

12% Passed In.

Next Auction

North Island only selling with 6,300 bales on offer 19th September.

Fleece Wools Summary

Good Style
Variation %: 2.5

Average Style
Variation %: Firm

16.5-23.5 mic
Variation %: 5

24.0-31.0 mic
Variation %: 10

Second Shears Summary

All descriptions
Variation %: Sellers favour

Oddments

Better colour
Variation %: 10

Poorer Style
Variation %: Firm

FREMANTLE MARKET REPORT

COMMENT

Fleece generally 200 cents dearer, skirtings 150 cents dearer, open tops 100 cents dearer.

FLEECE

The market rebounded strongly today on a very small offering, with prices generally 200 cents dearer. The broader end was most affected with 20.0u and broader up to 230 cents dearer.

9.2% of fleece passed-in.

SKIRTINGS

Skirtings were generally 150 cents dearer.

OPEN TOP

Open tops were generally 100 cents dearer on a very limited selection.

 

 

EASTERN AUSTRALIAN MARKET REPORT

Extraordinary market improvement.

COMMENT

All types and descriptions significantly dearer with the AWEX benchmark EMI 9.5% dearer.

FLEECE

17.5 micron and finer 2 to 3% dearer

18.0 micron 3 to 4% dearer

18.5 micron 6% dearer

19.0 / 19.5 micron 10% dearer

20.0 / 20.5 micron 11% dearer

SKIRTINGS

All descriptions 7% dearer, finest and best most affected.

 

OPEN TOP

Nominally 7% dearer in a small varied offering.

AUSTRALIAN WEEKLY MARKET REPORT

Comment

Finally, a more positive market tone. Client bids under the market were being rejected by the exporters and processors leading into the auction as supply tightened further. Growers have shown a reluctance to accept prices in a dramatically falling market leaving less than 20,000 bales sold for the week. This led to a more cautious trading approach from the large exporters. There was enough positive sentiment around prior to the sale. Most exporters of the belief that prices, if not at the bottom, were very close. This was on the basis of more interest and bids closer to spot market prices leading into the sale.

The selection of fine wool was better this week and this has helped the overall averages, including our Authentico Index’s. There was more interest from the Italian sector on 18.0 micron and finer with better style and specification types attracting strong competition. Of particular strength again this week was the 16.0-micron range. Many of the better New England region clips in this range are also NM and this is obviously attracting more attention from Europe. This is encouraging but worth noting that the current 16.0 micron levels are approximately 40% lower than end August 2018. The Authentico Indicator was 1.68% higher this week, primarily as a result of the better 16.0 micron result. 16.0 is not included in the AWEX EMI.

AWEX Eastern Indicator compared with 30/08/2019

Eastern Indicator

Close: 1365

Change in % -0.73

If you want to learn more about AWEX indicators, visit the official website http://www.awex.com.au

Authentico Index Values

15 Micron

Close: 2445

Change in %: +0.58

16 Micron

Close: 2216

Change in %: +4.63

17 Micron

Close: 2055

Change in %: +2.39

18 Micron

Close: 1953

Change in %: +1.09

19 Micron

Close: 1727

Change in %: -4.27

Authentico Indicator

Close: 2063

Change in %: +1.68

Forecast

28,000 bales rostered for sale next week. There is grower held bales in store waiting for a clearer market trend. Despite this, the Sydney sale is restricted to a one-day sale on Wednesday. With the benchmark AWEX EMI improving in US currency this week, we hope that this gives the market some confidence to return at these reduced levels. Ultimately, it’s a matter of confidence. No doubt demand is soft but consumption of wool will continue.

Auction offering – current week

Selling Centres for week 10

Market          Sale          Offered             Sold       Passed In

North                    S 10                      7039                         5990                 14.9%

South                   M 10                     11619                        10529                  9.4%

West                     F 10                       3036                         2675                  11.9%

Auction offering – next week

Market          Sale          Sale days          Volume

North                      S 11                        W                                6289

South                      M 11                       W-T                           16237

West                        F 11                        W-T                             5397

 

If you want to see the complete Wool Sales Roster click here.