US Perspective—13.09.11
13/09/2011
www.themaxfieldreport.com
The majority of the trade has returned from Asia and last week’s All China Leather Exhibition. The consensus of those who travelled prior to the show appeared to be that although tanners were not complaining about a general lack of leather orders, ALL of the tanners visited complained of high hide prices and their inability to operate profitably.
With regard to trading last week, it appeared that packers’ intentions were to try to sell hides at steady levels, however, these ideas were quickly refuted by buyers. It appears those sellers willing to accept slightly lower levels were able to move a below-average volume of hides last week with prices down roughly a dollar. In the meantime, we can confirm sales last week on HTS at levels of $89 delivered and BS at $88 delivered.
Meanwhile, there were plenty of rumours floating around the show last week accusing various packers of accepting much lower prices. Some of these rumours insisted packers accepted prices of $88 delivered Asia for HTS/BBS and followed up with accusations of packers accepting $87, while we also heard unconfirmed rumours of packers selling BS as low as $86 delivered Taiwan. At the end of the day, we were able to determine all of the above to be fictitious, as it appears this is no more than daydreaming on the part of buyers.
Sales reported include a couple of packer reports on regular weight BS ranging from as low as $81 to as high as $83, which many members of the trade doubt can be repeated in volume. We also have lighter-weight HNS trading as high as $84, while we have a packer laying claims to selling HNDC at levels of $72.
Those selling cowhides last week appear to have sold the most hides, albeit at lower levels. Reports claim sellers started the week attempting to hold prices steady; however, by the middle of the week we understand at least one of the major players began to get very aggressive and was willing to accept less money.
By the end of the Shanghai Fair prices were down as much as $2-$3 on HBC and HNC, while even HNDC that had been in good demand appeared under pressure with several sellers admitting they had to accept levels down $1-$2 from their last traded levels.
In the meantime, we were able to pick up a few reports of trading as we have sales of processor HNS as low as $81 and sellers looking to sell more at these levels, while we also have a processor laying claims to selling HNDC as low as $69 and willing to also trade more this way. The only other sale was a report of processors struggling to sell their BS resulting in sales of $77.
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