Weekly Market Wrap

Adrian Field Trading Manager

With Adrian Field, Melbourne
Assistant Trading Manager

June 20, 2003

The trend continues…

THE southern market continued to rise on a very small offering, with the indicator closing at 950 cents per kilogram, jumping 22c/kg.

Although all micron categories improved, it was the broader types that again proved most sought-after. The biggest price moves were in the 25-26 micron sectors.

Most of the demand came from local processors along with recent European business.

The market is definitely not representing current export demand. Some of the exporting companies which confirmed business a few weeks ago would be hurting considerably right now.

We have seen the scenario many times before and will continue to in future, where several companies over-commit themselves to deliver specific types and/or quantities. With these companies obligated to meet certain business deadlines, they have no option but to compete against one another (on a very small selection on offer) in order to fill their requirements, and hence a sudden spike in the market occurs.

We expect the market to cool down soon as current business enquiry is very scarce, and volumes on offer will rise slightly.

However, if somebody decides to come into the marketplace requiring any significant volumes of wool - then lookout!

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