US Perspective—05.02.13
06/02/2013
www.themaxfieldreport.com
Interest last week on big packer hides and on cowhides slowed considerably, as expected with the upcoming Lunar New Year holiday. As far as trading levels last week, we are aware of sales on HNS ranging from $104-$105 delivered, while trading levels on BBS ranged from $103-$103.50. We heard of some trading on regular-weight HTS at levels of $102 delivered, while there were some rumblings of traders willing to sell the same product at levels as low as $101. In the meantime, sources shared that they continued to see decent interest last week on Heavy Native Dairy Steers, while producers of HNDC also reported having no problem selling HNDC at levels as high as $77 FOB or $83 C & F.
There were also isolated reports of some minor interest on HNC and HBC; however, it is widely agreed that sellers were having a difficult time duplicating the last traded levels on these selections, as the sentiment of the trade was that trading levels obtained last week were thin. Popular opinion is that overall prices for the most part were unchanged with levels of the week prior, and the few selections that reflected incrementally lower levels were as a result of sellers finding a few isolated buyers desperate for hides and able to sell some limited volumes at higher levels.
In addition, it is also widely agreed that although sellers were able to maintain steady prices, they found themselves working much harder for sales than in the last several weeks when the vast majority of sellers had buyers bidding against themselves for hides. Meanwhile, one of our sources in Europe provided a report over the weekend, which, with minimal editing, said: “I had sales to China right up to the close of Friday my time (so very late at night China time). On my desk, I had a lot of interest. Some bids were too low to discuss but many were at, or just below. asking prices. I had sales to regulars in China as well as a couple of new customers in Italy. Prices were higher than the previous week, while the price I took late yesterday was the same as I took earlier in the week for the same item. I have no doubt that I will have to pay up for supplies next week. There many now who are talking about cracks in the market and maybe with China closed there is a chance sales prices may take a little hit (if the only buyers are from Italy for a week or so) but I do not see buying getting easier and there is no unsold stock here from what I see.”
As to what we expect this week, with the Lunar New Year Holiday starting, we expect a very lacklustre week of trading. It will certainly be interesting to monitor the activity of buyers as there are opinions among some members of the trade that a few tanners went into their holiday still short of hides. Meanwhile, we are hearing a few rumblings about tanners who are revoking emergency pricing clauses in their contracts with some of the major brands.
According to sources, some of these increases could be as much a $0.20 per square-feet with comments that if the brands refuse, some tanners are insisting they will simply walk away from the business. In the meantime, it appears the sentiment of the trade is that the best thing for the market is to take a much-needed break for the next couple of weeks with Asia on holiday. This in the opinion of several pundits would allow the market to consolidate and once tanners return from holiday we can then start looking toward the APLF exhibition in Hong Kong (March 25-27) and obtain a better idea of what we can expect for the leather business as we move forward.
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