FREMANTLE MARKET REPORT

COMMENT

Fleece 100-130 cents cheaper, skirtings 80-90 cents cheaper and open tops 50-75 cents cheaper.

FLEECE

The fleece market fell heavily today with prices generally 100-120 cents cheaper across all microns and types.

Fleece had a passed-in rate of 61.8%.

SKIRTINGS

Skirtings were around 80 cents cheaper.

OPEN TOP

Open tops were generally 50-75 cents cheaper.

 

 

EASTERN AUSTRALIAN MARKET REPORT

Market cheaper. Demand was thin as buyers looked for ‘good value’.

COMMENT

The very poor offering didn’t help, possibly the worst on record for a Sydney sale. Passed in rate remains high.

FLEECE

Practically nil good fine wool available.

All average quality types and descriptions were up to 5% easier with finest lots least affected.

SKIRTINGS

4 to 5% easier in a small inferior offering.

OPEN TOP

Insufficient to quote.

 

ANNUAL CASHMERE MARKET REPORT 2019

Annual Cashmere Market Report 2019

CHINA

In 2019, cashmere production in China was 15.437,8 tonnes, a reduction of about 13.5% compared to 2018. Due to the decrease in demand in 2019, it is estimated that production in 2020 will be about 10% less than last year.

At the beginning of 2019, demand for cashmere was still good. With the reduction in production, the price of cashmere rose significantly in April and May in conjunction with the arrival of the new season.  From June to July tariffs were increased due to the Sino-American trade war.

In addition, in 2019 the price of lambs rose by about 15% to 18%, which led to a further reduction in cashmere production.

Starting in August, demand for cashmere decreased significantly, leading to a reduction in prices until the end of the year. Most Chinese factories have ceased production.

Overall, the average price of cashmere in 2019 fell by around 12% compared to 2018.

From January to June 2019, China exported 1.331 tonnes of cashmere, an increase of 8.3% compared to the same period in 2018. Total turnover was USD 98.228.000, an increase of 9.1%. However, from June to November, 2.630 tonnes of cashmere were exported, a decrease of 10.2% compared to 2018. The total amount was USD 129.156.000, a decrease of 8.9% compared to 2018.

For the next season, all factories should return to regular operation only from March due to the Coronavirus problem. If demand returns, prices may rise again, especially for fine/beautiful types.

MONGOLIA

The extreme winter conditions and the dry winter of the Mongolian territory have caused extensive losses of livestock, despite which the shepherd communities have tried to survive as much as possible. As there is no rain, the wind dries the grass and the animals are leaner than usual.

According to the Mongolian statistical office, there are about 70.9 million heads of livestock in Mongolia. In 2019 the total number of cashmere goats reached 29 million, equivalent to about 9.800 tons of greasy cashmere, compared to 27 million goats in 2018, equivalent to about 9.400 tons of greasy cashmere. The price of greasy cashmere increased by 28% compared to previous years. The cashmere industry is expected to grow by 3.9% per year for the coming years.

Last year, Mongolia produced 8.066 tons of clean cashmere (90% of total cashmere production) which was mainly exported to China and 408.5 tons of dehaired cashmere (the equivalent of 817 tons of greasy cashmere). The main importers of dehaired cashmere were Italy with 342 tonnes, England 46.3 tonnes, Germany 3.8 tonnes, India 5.1 tonnes, and other countries 11.3 tonnes. 90% of the whole production was first-stage processing, with final product manufacturing only accounting for 10%.

In spring 2019, Mongolian cashmere shepherds sold their cashmere at 145.000 MNT/kg (54.70 USD/kg), almost 40.000 MNT (15.00 USD/kg) more than in 2018 prices. In 2019, the cashmere season in Mongolia opened with very high prices of 54-55$/kg, although the market in Europe was relatively quiet.

Both Mongolian and Chinese traders hoped that prices would remain as high as in 2018. The strengthening of the RMB gave Chinese traders the opportunity to get cashmere at a reasonable price.

Unfortunately, from June/July 2019 prices fell due to European market demand, Chinese market consumption and the Sino-American trade war. Macroeconomic factors also had a substantial impact on the cashmere industry: labour costs, tax rates, interest rates, and exchange rates.

In the future, the Mongolian government will promote value-added products for export.

On July 26, 2018, Representative Ted Yoho and nine other members of the US House of Representatives delivered a trade bill to the US Congress. The bill would seek to promote trade between the United States of America and Mongolia by allowing duty-free trade for certain imports from Mongolia, such as cashmere products and textiles.

In connection with the trade bill, Mongolian President Battulga Khaltmaa visited the United States on 31 July 2019. During the visit, the Mongolian President expressed his full support for the trade bill and his appreciation to the sponsors.

The trade act would help the Mongolian economy to open more business opportunities to export cashmere products to the U.S. market. Mongolia supplies about 48% of the total greasy cashmere to the world market, making the country the second-largest supplier of greasy cashmere in the world, but uses only 15% of it to produce ready-to-use finished cashmere garments locally.

The remaining 85% of greasy cashmere is sold as semi-finished products to other markets with lower added value, which is becoming the focal point of the Mongolian government and domestic cashmere producers.

The United States of America is considered the second-largest consumer of finished cashmere garments. This duty-free treatment would open up a huge opportunity for Mongolia to diversify its economy.

MIDDLE EAST

For Iranian cashmere, the year 2019  started with predictions of price increases similar to the previous year. However, most traders ignored or preferred to ignore, that any price increase in 2018 was due to strong fluctuations in the value of the local currency against international currencies, caused by the economic sanctions imposed on Iran by the Trump administration.

The value of the local currency halved during 2018, and in some periods it even lost two-thirds of its starting value. The cashmere market was not so rigid in 2018, so Chinese traders took the opportunity to use their expensive dollars and rushed into the Iranian market. The result was an increase in the price of Iranian cashmere at a rate of 400% in local money but only 50% in USD.

In 2019, the international cashmere market began to collapse with prices falling sharply, again perhaps due to the sanctions imposed by the United States on many Chinese goods.

Chinese traders have not been seen often on the market this year if not only occasionally and only to test the market in Iran. The local currency has also reached a stable level. Therefore, both factors that generally influence the rise in prices have been absent.

Although once again there have been ups and downs in the value of the local currency, the market has seen a stable price structure in terms of both Rials and USD throughout the year.

Traders, who had bet on price increases, bought large quantities at high prices and were unable to dispose of their stocks.

As a result, not much was sold last year and a lot of stock has been maintained for 2020, but the price is still high. This has caused Iranian cashmere to lose its market and there is not much hope for the new season unless the arrival of the new shear in April forces traders to start selling their leftovers at a loss to stay in the game.

Again, much will depend on Chinese traders and also on the devaluation of the local currency, although it now seems stable, the tighter sanctions envisaged could lead to further devaluation and again to a sharp rise in cashmere prices in Iran.

January Fairs 2020

Report from the January Fairs 2020

For everyone involved in the textile manufacturing supply chain, the new year tends to start quite busy as several large textile trade fairs are scheduled during the month of January. Members of the Schneider Group team also made sure to attend the trade fairs and we summarised a small report for you with the key trends and impressions.

Heimtextil – Frankfurt, Germany – 07-10 January 2020

Heimtextil is the largest international fair for home textiles ranging from bedding, curtains, towels to wallpaper. This year marked the 50th edition of the fair. The attendance of exhibitors, as well as visitors, was lower compared to previous years. The organiser Messe Frankfurt explained the lower participation with the earlier date, consolidation of retail outlets and growth of e-commerce as well as a general economic slowdown.
As the years before, the major topic throughout the fair remained sustainability. However, retailers visiting the fair this year seemed to have had a more educated and deeper understanding of sustainability and well understood the difference between greenwashing and certified sustainable supply chains. To mark the commitment to sustainability for the entire home textile industry, Heimtextil partnered with the United Nations to jointly focus on the UN’s Sustainable Development Goals.
Another key focus lay on the topic of sleep. More and more natural materials find their way back into the bedroom as sleep or the lack thereof has been identified as a major health crisis. This focus on sleep is beneficial for wool as more and more research conducted by AWI and The Woolmark Company together with IWTO is providing evidence of how wool ensures a better night’s sleep.

Domotex – Hannover, Germany – 10-13 January 2020

Domotex, the largest floor covering exhibition, also had a decline in participants. Reasons for the lower participation being consolidation in the market as well as economic pressures. The theme of the fair was ‘Naturalness and Sustainability’ as retailers are looking for flooring products that contribute to a sense of wellbeing and staying healthy indoors. This trend is a result of the world becoming more chaotic and complex which makes consumers search peace and calm within their own four walls. While wool carpets obviously meet this mark, also synthetic and hard floor coverings presented their latest product designs and innovations that meet or create a feeling of naturalness and sustainability.

ISPO – Munich, Germany – 26-29 January 2020

The last show of the month was the largest international fair for sport and outdoor gear. Similar to Heimtextil, the ISPO fair celebrated its 50th anniversary focusing only on discussions about the future of the sport and outdoor industry and not on the past. The fair’s three themes were 1. Be Responsible, 2. Be Active and 3. Be Creative. This of course also meant that sustainability was one of the key topics throughout the fair; the logic being that if nature is destroyed there is no playground for sports and outdoor activities anymore and therefore no market for sports and outdoor industry.

Many exhibitors showcased their sustainable product innovations. Many brands presented wood-based (not wool) fibres as their biodegradable and sustainable solution or focused on recycled synthetic fibres. Of course, wool was also well represented as a sustainable fibre choice for many brands. More and more brands even presented not only wool base layers but also wool mid- and outer layer garments. This means a wider range of wool micron fibres finds their way into sports and outdoor apparel.

Wool was a key component of the 2020 product of the year. The Alpina Sports Prolan Vest included back protection made of new wool instead of plastic polymers. The vest is for freeskiers or mountain bikers to protect against serious injuries. The vest and the back protector are both made from wool and therefore ensure more comfort through better body climate and odour neutrality and sustainability.

On Monday afternoon, the International Wool Textile Organisation (IWTO) had organised two hours of presentations and discussions, called ‘Meet the Wool Chain’. A woolgrower, shearer and broker showcased their work and answered audience questions. The session was well attended by fair visitors.

As our report shows, sustainability has been a key topic throughout all of January fairs, not only in 2020 but also during the previous years. However, the discussions about the topic have deepened and became more differentiated. At ISPO for example, we saw many brands emphasize that they have been acting sustainable for many years. This form of differentiation becomes necessary as all brands level up their game on creating more sustainable supply chains and products. A better and more differentiated understanding among brands and retailers of the individual sustainability topics will be beneficial for wool while at the same time will hold us accountable to deliver more detailed information about how and why we do the things we do.

AUSTRALIAN WEEKLY MARKET REPORT

Comment

It was a much more stable week for wool prices following the uncertainty of the last sale. There was a little movement of price between centres as prices aligned. The encouraging point was more widespread activity from those buyers representing Chinese interests. This lifted the general market overall, including the more average types. It was more noticeable as a feeling of ‘market confidence’ rather than measured in price indicators. The best performing sector was the fine merino types. The 17.0 to 18.5-micron range were those most keenly sought after even in a disappointing selection consisting of longer staple and lower yielding wool types. There are only selected lots of quality fine fleece wool available.

AWEX Eastern Indicator compared with 20/03/2020

Eastern Indicator

Close: 1442

Change in % +0.28

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

Authentico Index Values

15 Micron

Close: 2446

Change in %: -0.57

16 Micron

Close: 2220

Change in %: +0.91

17 Micron

Close: 2018

Change in %: -0.09

18 Micron

Close: 1884

Change in %: -0.32

19 Micron

Close: 1787

Change in %: -1.33

Authentico Indicator

Close: 2038

Change in %: -0.09

Forecast

Wool and livestock auctions remain exempt from the federal government ban on auction houses and sales were allowed to continue. However, with further restrictions expected from state and territory governments in coming days, we could face more roadblocks to a continuing trade of wool. The situation changes daily. The industry is examining all possible alternatives to the open cry auction to allow the exchange of ownership to continue without the necessity to congregate in the auction room. Buyers must maintain access to show floors to inspect samples for this to happen. The sale rooms have been altered to follow ‘social distancing’ rules put in place and regular break intervals have been scheduled along with government guidelines. Regardless of this, our position remains that the health and well-being of our staff, friends and family is the priority and we will act accordingly as we see necessary. Sales have been rescheduled for a Tuesday / Wednesday format allowing Thursday as a ‘contingency’ day should any particular auction be postponed. At the time of writing, Melbourne has been scheduled for a large 2-day sale. Buyers are concerned with the necessary face to face time in the auction room that will result and potentially it could be re-configured into a 3-day format concluding on Thursday.

Auction offering – current week

Selling Centres for week 39

Market          Sale          Offered             Sold       Passed In

North                      S 39                     8350                         7439                10.9%

South                     M 39                    26495                       22866              13.7%

West                       F 39                      8089                         6485               19.8%

Auction offering – next week

Market          Sale          Sale days          Volume

North                      S 40                    T/W                             10055

South                     M 40                    T/W*                           27370

West                       F 40                     T/W                              8385

*under review

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

EASTERN AUSTRALIAN MARKET REPORT

Market par to 1% dearer.

COMMENT

Good solid competition.

FLEECE

All descriptions par to 1% dearer (10-15c)

SKIRTINGS

Very firm

OPEN TOP

Unchanged

 

FREMANTLE MARKET REPORT

COMMENT

Fleece 10-15 cents cheaper, skirtings mixed and open tops firm.

FLEECE

The fleece market was slightly cheaper today with 19.5u and broader around 10-15 cents easier, while 18.5u and finer closed unchanged.
Fleece had a passed-in rate of 16.8%.

SKIRTINGS

18.5u and finer skirting were 20-30 cents dearer, while 19.5u and broader were 10-20 cents cheaper.

OPEN TOP

Open tops were generally firm on a limited selection.

 

 

EASTERN AUSTRALIAN MARKET REPORT

Market rebounds positively.

COMMENT

Chinese interests dominating.

FLEECE

Little to no best fine wool on offer.

Good types all 1 to 2% dearer with the broader edge (20.0>) most affected.

Even low yielding and higher VM lots in keener demand today.

SKIRTINGS

Generally 1% dearer

OPEN TOP

Up to 1% dearer.

 

EASTERN AUSTRALIAN MARKET REPORT

Market 1 to 2% easier best style / strength least affected.

COMMENT

Good widespread competition. China leading the way.

FLEECE

18.5 micron and finer generally unchanged in good competition.

19.0 to 21.5 micron 1% easier

SKIRTINGS

Best par to 1% dearer. B/C Fault 2% easier.

OPEN TOP

Nominally 2% easier.

 

AUSTRALIAN WEEKLY MARKET REPORT

Comment

The fall in wool prices in foreign currency was the extraordinary feature this week. Prices were no doubt cheaper in local currency but the fall in USD and Euro values was significant. The Australian dollar is always less favoured during times of turmoil as investors move to the safer global currencies or gold. The Australian dollar is also influenced by demand for our minerals with iron ore and coal exports likely to be impacted by the pandemic. The Reserve Bank of Australia injected a further stimulus to the economy this week with a cut in the official interest to 0.25%. This sent our dollar plummeting further against the other major currencies.

AWEX Eastern Indicator compared with 13/03/2020

Eastern Indicator

Close: 1438

Change in % -5.46

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

Authentico Index Values

15 Micron

Close: 2460

Change in %: -4.65

16 Micron

Close: 2200

Change in %: -7.13

17 Micron

Close: 2020

Change in %: -6.39

18 Micron

Close: 1890

Change in %: -5.78

19 Micron

Close: 1811

Change in %: -5.68

Authentico Indicator

Close: 2040

Change in %: -6.12

Forecast

As a slight diversion from the regular commentary, we’ve included a nice piece from an Italian psychologist, Francesca Morelli.

“Nature has its way of balancing things when its laws are turned upside down.

In a society based on productivity and consumption, in which we all run 14 hours a day, we are forced to stop, stay home for many days and deal with a time that has slowed down. Do we still know what to do with it?

In a phase in which the education of our children is, necessarily, often delegated to other figures and institutions, the virus closes the schools and forces them to find alternative solutions, putting mums and dads together, rebuilding the family.

In a dimension in which relationships, communication and sociality are virtual and social networks give us the illusion of being together, the virus takes away human contact: nobody touch each other, no more kisses, no more hugs. How much have we taken these gestures and their meanings for granted? How much do we miss them…

In a selfish society where everyone thinks just for himself, the virus sends us a clear message: the only way out is working together, finding the sense of belonging, protecting the community and gives you the feeling of being part of something greater to take care. We all feel more responsible as now, more than ever as we’ve never been depending so much on each other.”

Auction offering – current week

Selling Centres for week 38

Market          Sale          Offered             Sold       Passed In

North                      S 38                     8792                        6927                 21.2%

South                     M 38                    25128                      18627                25.9%

West                       F 38                      8066                        5317                 34.1%

Auction offering – next week

Market          Sale          Sale days          Volume

North                      S 39                    W/T                              9446

South                     M 39                 T/W/T                          29043

West                       F 39                     W/T                             11385

 

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