Last week saw the EMI slump to its lowest price since 2015 finishing at 1110c, 29c down.
In USD terms this equates to 771c. In what has been a remarkable turn of events, the EMI is now 1000c lower than it was in 2018. 28,029 bales were offered this week, almost twice as many as the week before.
With double the supply heading to auction, the vast majority found buyers, with only 11.5% of the offering being passed in.
This indicates some level of strength and demand. Some in the industry thought the increased supply would not be soaked up.
Looking forward, global markets remain uneasy and fears of a second wave of the virus will likely impact consumer spending. Consumer spending, especially for premium goods such as fine wool, will likely remain low until we see major positive news regarding COV-19.
Market sentiment has rapidly turned negative once again, with fears that policies will slow or even halt business reopening’s in order to stem further spread of the virus. Dramatic falls were seen across all types this week.
The largest drop was seen for crossbred wool types, finishing the week 45c lower. Superfine Merino Fleece < 18.5 micron dropped by 25c and fine Medium Merino Fleece fell by 35c. Next weeks auctions will see 31,072 bales offered, once again higher than this weeks.
If demand can keep up then the price may stabilise, but if buying activity slows then we could be in for another drop. Looking online, no lots were sold this week, in line with the increased supply at the physical sales.