Market Intelligence

The AWEX EMI closed the week on 1139c up 35c at auction sales in Australia this week. 31,951 bales were offered with a possible clearance record of 98.2%, (1.8% pass-in rate). The AUD V USD exchange rate retraced from the previous week’s 69.08 USC high, ratcheting down to 67.27c this week. This resulted in the EMI in USD rising buy a meagre 4c to settle on 766Usc, the highest EMI (in USD) since late June 24). The spirited bidding carried over from last week’s market with aggressive competition in the rooms between a wide range of Exporters grappling to secure enough bales to complete their orders. The sudden improvement has primarily emerged from Chinese processors, however the increased activity from our largest purchasing nation was the catalyst for improved interest to purchase from all our export destinations. With the announcement from the PBoC to release stimulus measures driving last week’s rise, this week it seems the world was looking to the Chinese Government for their follow through actions to support this measure. There are now many discussions around the sustainability of this price rise and wether the core supply and demand principles at play in the wool consuming countries around the world have changed. As mentioned last week the sales centres were split on selling days due to the NSW public holiday which left Sydney offering in isolation on Thursday. When sales are held in isolation the EMI rarely reflects the actual rise on the day and this was definitely the case this week.