US perspective - 1.10.13
01/10/2013
www.themaxfieldreport.com
According to various members of the trade, packers enjoyed another decent week of interest. Sources report Asian tanners were very active last week, as it appears they wanted to try to take care of their buying needs prior to departing for their National Day Holidays. Members of the trade report that overall, interest was rather broad based last week with all countries represented, while there was also no shortage of traders interested in buying as well.
Overall, prices were up $1-$2 across the board depending on the selection and it appears the sentiment of the trade is that it is likely packers were able to easily liquidate a week’s worth of trading, while worth noting, we understand there was a decent amount of interest not concluded due to too low of ideas from buyers.
Sales levels obtained last week allowed HNS to trade as high as $96 FOB, while BBS sold at levels of $93 earlier in the week and $94 by the end of the week. Sales on HTS started the week at $90 and by the end of the week, were selling at $91. We heard reports that additional attempts to buy at levels of $91 were refused on Friday, while there are some packers insisting that they sold at levels as high as $92 FOB that we could not confirm. Meanwhile, BS were trading at $90 FOB by the end of the week, while trading levels of heifers was quoting HNH at $82 FOB and HBH at $80 FOB.
Reports from members of the cowhide trade also report a decent week of sales. Sources share that interest was decent with sellers having their “pick of the litter” as it pertained to bids. As of this writing, it appears a combination of lower-than-normal number of cows in the slaughter mix coupled with continued decent demand for cowhides is allowing producers to dictate pricing.
Trading levels last week saw HNDC bring levels as high as $83 FOB after trading at levels of $82 FOB earlier in the week. Meanwhile, trading levels on HNC finished as high as $75 FOB towards the end of the week, while demand for HBC saw prices improve to $59 in the north and $54 in the south by week’s end.
THE LOOK AHEAD
We look for a lacklustre week of trading this week, as the autumn holidays will close the majority of tanneries in Asia this week. Usually, such an event would result in an uneventful week of trading; however, considering the amount of interest last week that was not concluded due to ideas of some buyers falling short of sellers’ expectations, we would not be surprised if there was not an attempt from these buyers to restart conversations with perspective sellers.
Also likely to contribute to a lack of trading this week is that members of the United States Hide Skin & Leather Association will gather this Thursday and Friday in Chicago for their annual convention. This will make it a bit more challenging to collect market data / information this week; however, with most of Asia already out on holiday, it is difficult to believe there will be a lot of trading this week.
In the meantime, as the price of HTS is broaching the $100 delivered, the question on everyone’s mind is if there enough leather demand to allow sellers to push prices back up over the 100 dollar level. If we are to listen to some members of the trade, lower slaughter volumes coupled with claims there are a number of tanners who do not have enough raw stock; without a doubt, prices will push past the century mark.
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