Trade war keeps punishing global markets

Trade war keeps punishing global markets | Micron Mirror


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Tom Rookyard says the ongoing trade war has battered confidence around the globe, with no clear end in sight.

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The ongoing trade war has battered confidence around the globe, with no clear end in sight.

The ongoing trade war has battered confidence around the globe, with no clear end in sight.

The wool market continued its negative trend last week, however with smaller reductions as opposed to the extreme falls the market had taken.

Last week's retraction was reflected by the AWEX Eastern Market Indicator losing five cents a kilogram and a further 11c/kg to close off at 1497c/kg or in US dollar terms, US1015c/kg.

Before auction there was talk of interest in the market and that business had concluded in China, and, notably interest online.

On Monday morning eight bales of 18.4-micron fleece wool sold for 1024c/kg (greasy) or 1595c/kg (clean).

This lot was offered by Moses and Son and branded R&R/MILLARA.

In addition to this buyer, many other exporters logged onto AuctionsPlus Wool.

On Tuesday, activity stopped when the physical auctions opened and all the talk of interest slowed.

Combing wools of all descriptions was reasonably well supported, however it was cardings that took a hit.

Online, AuctionsPlus has once again received modest pre-auction interest with Merino crutchings and pieces selling on Monday.

The recent announcement that China will impose tariffs on $75 billion worth of American goods, to which US President Donald Trump retaliated with a tweet stating that the US would raise tariffs on $550 billion of Chinese imports, is not aiding any global markets right now.

The ongoing trade war has battered confidence.

This does not paint a good picture for a wool market which relies on China to purchase 70 per cent of its product.

Notably, very little of that wool actually ends up in the US, but the trade war does not offer much assurance for Chinese financial institutes to lend to Chinese mills.

The current retraction in the market does have the small silver lining that growers who opt or are able to hold onto wool, will be well poised in the future when supply is tight and the market heads north again.

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