AUSTRALIAN WEEKLY MARKET REPORT

Comment

We’ve now been selling around 30,000 bales per week for a few weeks with lower passed in rates. A few months ago, the market could only manage 20,000 per week. This is a much stronger market performance. Some would have expected a softening tone this week but prices were dearer from the outset. The difference this week is that all types and descriptions were dearer. 20.0 micron and broader settled a little towards the close on Wednesday but finer merino’s, crossbreds and cardings all maintained the levels to the close.

The performance of the superfine sector, particularly 17.5 micron and finer, has been a stand out. Noting that we are currently in the peak period for annual supply and beyond November availability is expected to drop. The exception being a couple of opportunities in February 2021.

AWEX Eastern Indicator compared with 02/10/2020

Eastern Indicator

Close: 1022

Change in % +2.61

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

Authentico Index Values

15 Micron

Close: 2372

Change in %:  +2.42

16 Micron

Close: 1973

Change in %: +0.92

17 Micron

Close: 1735

Change in %: +0.52

18 Micron

Close: 1532

Change in %: +2.06

19 Micron

Close: 1331

Change in %: +2.31

Authentico Indicator

Close: 1745

Change in %: +1.39

Forecast

Grower held stocks remain at reasonably high levels but clearly growers are prepared to hold wool for better market conditions. Seasonal factors are favourable. Livestock prices, while settling are still high, and crop yields will be very good. Both livestock and crops generally need to be sold when ready. This provides cash flow to woolgrowers and allows them to be hold wool in store. A large percentage of the wool held in store is drought affected with low vegetable matter (VM). This could well be an advantage as the VM of the clip is expected to increase into our summer and through to autumn 2021.

Auction offering – current week

Market          Sale          Offered             Sold       Passed In

North                      S 15                      7365                         7079                  3.9%

South                     M 15                     15508                      14583                 6.0%

West                       F 15                       5473                         5200                 5.0%

Auction offering – next week

Market          Sale          Sale days          Volume

North                      S 16                        T / W                         7971

South                      M 16                       T / W                       16828

West                        F 16                          W                             5669

 

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

FREMANTLE MARKET REPORT

COMMENT

Fleece generally 10-15 cents cheaper, skirtings 10 cents cheaper and open tops generally 10-15 cents dearer.

FLEECE

The fleece market gave up some of yesterday’s gains, with prices generally 10-15 cents cheaper today. In a small sale, and with a lot of wool withdrawn, the market maintained these levels through to the end of the sale.

The passed-in rate for fleece today was 4.4%.

SKIRTINGS

Skirtings were generally 10 cents dearer.

OPEN TOP

Open tops were generally 10-2 cents dearer on a very limited selection.

 

 

EASTERN AUSTRALIAN MARKET REPORT

Market stable

COMMENT

There was little change today as the market settled at current levels.

FLEECE

17.5 micron and finer slightly dearer in an improved offering

18.5 / 19.5 micron buyers favour

20.0 / 21.5 micron par to 1% easier

SKIRTINGS

Firm  unchanged

OPEN TOP

Unchanged

FREMANTLE MARKET REPORT

COMMENT

Fleece generally 30-50 cents dearer, skirtings 20-50 cents dearer and open tops generally 20-60 cents dearer.

FLEECE

The fleece market was dearer today, with the fine end most affected rising up to 50 cents. 19.5u and broader were around 30 cents dearer. The sale opened strongly and continued to rise throughout the sale, particularly for finer low cvh wools.

The passed-in rate for fleece today was 5.3%.

SKIRTINGS

Skirtings were generally 20-60 cents dearer with the fine end most affected.

OPEN TOP

Open tops were generally 20-60 cents dearer with the fine end most affected.

 

 

EASTERN AUSTRALIAN MARKET REPORT

Market dearer

COMMENT

A strong market tone from the outset and improved as the sale progressed.

FLEECE

All fleece opened around 1% dearer but closed more than 2% dearer.

SKIRTINGS

1 to 2% dearer

OPEN TOP

2% dearer

CASHMERE MARKET REPORT

APRIL – SEPTEMBER 2020

 

CHINA

2019 had been already a tough year for the cashmere industry all around the world. From the middle of February 2020, some dehairing mills were starting to receive some orders, but with the spread of COVID-19 and the subsequent worldwide lockdown all these orders have been canceled. In April, the price for cashmere decreased by about 15% compared to January. The production had been similar to 2019, but the mills have been forced to stay closed until the beginning of June, initially due to pandemic and later on because of the complete lack of demand for cashmere.

In June and July, most of the top makers had to stop their mills, but spinners were struggling since they had to keep spinning to pay their workers. The price of cashmere yarns reduced by around 18% compared to the period before the Chinese New Year.

The market in China slightly increased only at the beginning of March after Chinese New Year, when top makers producing the orders booked in November and December 2019. But as the pandemic spread all over the world from the middle of March, the entire market went down sharply and everyone had to slow down the business. Luckily, China has been able to reduce the losses caused by the virus, as the mills received big supports from bank loans and a tax break. The government promoted encouraging consumption policies after the lockdown was over at the end of March, trying to support the local market.

MONGOLIA

The annual inflation rate in Mongolia slowed to 2.1 percent in August of 2020 from 3.4 percent in July.

Mongolia exports of wool, animal hair, horsehair yarn, and fabric was US$362.82 million during 2018.

Mongolia exports of wool, animal hair, horsehair yarn and fabric – data, historical chart, and statistics – were last updated in September of 2020.

Exports in Mongolia decreased to 690.20 USD Million in August from 960.50 USD million in July of 2020.

Due to the frozen situation of the global market, the GDP of Mongolia has shrunk by 6.1 percent.

According to the Mongolian statistical office the livestock in Mongolia is continuing to increase, arriving at 30 million goats (from a total of 70 million animals), the total production of cashmere arrived at 10.000-12.000 million kg of greasy.

The Mongolian government has announced an MNT 300 billion (USD 100 million) loan package to support its cashmere industry to face the coronavirus pandemic, with one condition that cashmere processors have been offered loans to buy raw fiber at a minimum price of 100,000 MNT/kg equivalent (38$/kg). The Mongolian cashmere market was almost firm from March-April 2020, nobody was accepting last year’s price.

The cashmere market is a strategic business in Mongolia because it involves 230.000 herding families and their vote for during an election is very important. This is why the Mongolian government promised 38$/kg for greasy cashmere, to obtain the herders’ vote. But after 2 months of negotiation and delays, the cashmere price has dropped to the real market price. The Mongolian government tried to maintain these high prices, but there is no demand on the international market.

The Mongolian government has issued subsidies to herders of about $7 per cashmere goat and offered processors lower interest rates on subsidized loans provided they purchase the raw material at 2019 prices. As soon as the herders received subsidies from the Government they stopped selling the cashmere and waited for the better prices close to 2019.

Due to the COVID-19 lockdown, Mongolian borders were closed from the end of January until now, nobody can travel to Mongolia and Chinese traders are missing. The shipments of scoured and dehaired cashmere to China and overseas have been delayed.

All these factors have contributed to the price reduction from $38 per kilo in 2019 to 24-27/kg in 2020.

In 2007-2008 during the financial crisis the price fell down by half, the same situation is repeating this year.

MIDDLE EAST

In February just before the widespread COVID-19 outbreak, some Chinese, Afghan, and even Pakistani traders had bought in Iran some lots hoping to take benefit from depreciated local money and this strengthened the prices. Then in March, the worldwide outbreak of pandemic shattered the markets and this coincided with the Iranian New Year holidays. All of the above factors caused silence on the raw market.

Usually, in February new clip start appearing in the market and the battle of pricing begins, but this year’s market was absolutely dead with no news on prices and availability.

In May, prices in Iran dropped like everywhere else. To start, there was resistance but since no Chinese buyers came to purchase, prices gradually came down. Surprisingly, though, the final prices of raw Iranian cashmere were higher than Mongolian cashmere ones. By the end of June, some Chinese buyers have appeared again and their purchases put an end to declining prices although their purchase intention was only for limited volumes. The Chinese traders could benefit from free-market currency which was at least 25% more expensive than Iranian export currency.

In July, the Chinese, Afghan, and eventually Pakistani traders began to buy in Iran enjoying weak local currency. The Iranian government tried to stop this situation by blocking the export of raw cashmere, which was possible with some duties to be paid. Since this governmental intervention, important quantities bought by Pakistani traders destined for China, are now stuck and cannot be delivered.

FUHRMANN NZ MARKET REPORT

Summary

Market continues to rise.

Comment

North Island only offering 6,500 bales.  The selection consisted of 50% crossbred second shear 33-37 micron good colour bulk 75mm, 25% crossbred hogget fleece wool, mainly 33-37 micron good colour 75/125mm and longer, 15% associated oddments, 8% reoffered lambs fleece  and 2% miscellaneous types.  Indian Subcontinent and Australasian carpet mills main with support from the Continent, China and United Kingdom.

Fleece Wools

All descriptions 75/100mm and longer sellers favour.

Second Shears

75/100mm & longer sellers favour.

50/100mm & shorter 5% dearer.

Oddments

Clothing oddments 5.5% dearer.

Lambs

Generally unchanged.

Passings

7% Passed In.

Next Auction

South Island only, offering 8,300 bales, 8 October 2020.