US Perspective—09.04.13
09/04/2013
www.themaxfieldreport.com
Last week saw packer and processors with only limited offers, with most hides offered in selections that are usually a bit more difficult to sell. Meanwhile, asking prices for the few hides offered reflected increases ranging from $1-$2 depending on the selection; packers were not discouraging buyers who had interest in more preferred selections from bidding unsolicited.
According to sources, the week started out on a bit of a sluggish note. Whether this was due to members of the trade returning home from Asia over the weekend or the lack of offerings is unclear. However, by mid-week we understand that there were a decent number of buyers interested in hides, with interest coming in from several different directions.
In general, the vast majority of buyers started out with ideas of trying to hold prices steady; however, they quickly found that sellers had no intention of selling any more volumes at last week’s levels.
At the end of the day, a modest number of buyers recognised that sellers were continuing to ride the momentum of decent sales prior to the APLF exhibition at the end of March and, begrudgingly, agreed to higher prices, allowing sellers to register another week of higher prices.
However, it is widely agreed that it is likely that sellers in general passed on more business than was concluded and the consensus in the trade was that the volume of hides sold last week pales in comparison to the couple of weeks prior to the Hong Kong Fair.
As far as trading levels last week on a C&F basis, we heard of sales on BBS as high as $108.50, while HTS brought levels of $107, while there were rumblings of HNS bringing levels as high as $110. Meanwhile, on an FOB basis, we know of sales on HNS at levels of $102 and unconfirmed rumours of $103, while BBS were sold at $101 and HTS at $101 as well, while there were rumours that some packers passed up $101 Friday afternoon.
In regard to FOB prices on cowhides, HNDC advance to levels of $83 ($90 C&F), with sources sharing that here was decent inquiries on this selection. Meanwhile the number of HBC and HNC in the slaughter mix is trending lower and this is helping to allow producers to register some incremental improvement on prices (FOB) last week as we know of sales on HNC as high as $76, while HBC were sold at $67 North & $65 South.
Now that the vast majority of the trade has returned from the Hong Kong and Bologna fairs, it will be interesting to visit with members of the trade and gather their thought on what they believe we can expect for the leather business in the second and third quarters of 2013.
As to what we expect for this week, we tend to suspect that it is rather likely we will see limited offerings again this week, especially with thoughts by pundits that we will not yet see another appreciable increase in slaughter numbers.
In the meantime, popular opinion in the trade is that there are still a number of tanners in need of product, supported by how much business that was not concluded last week. All of the above is only validating the opinion of sellers that there is no reason why the price of hides should follow their usual pattern and soften following the Hong Kong fair.
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