US Perspective - 26.08.14
26/08/2014
www.themaxfieldreport.com
Reports from the various sources we spoke with last week appear as if they are in agreement it was a fairly uneventful week of trading on big packer hides. Attempts by buyers to secure additional quantities of regular weight HTS at levels of $109 FOB were refused by packers with claims they were “over-sold”, while packers exhibited success in achieving higher prices for HNS, BBS and CBS.
In the meantime, it appears the mix of wet-salted hides being produced in the last several weeks appears heavily tilted in favour of Jumbo and Super-Jumbo steer hides. According to sources, packers are struggling to ship their outstanding orders of regular-weight hides, while we understand there is room to negotiate prices on these heavier hides, especially if the buyer is interested in modest volumes that can ship within the next two or three weeks. Meanwhile, reports on wet blue hides are mixed. Several producers are laying claims to enjoying decent interest over the last several weeks, while we have heard from some other sources there are still sellers who are pressing for sales, coupled with claims that some producers still have significant inventories outside their facilities.
In the cowhide market, there were reports of a small number of letters of credit opened from tanners in northern China. In the meantime, we continue to hear strong demand for heavier-weight cowhides, while sources share that it is still relatively easy to find buyers for HNDC. Meanwhile, sources share that the firm tone of the big packer market may be lending some support to sales of lighter-weight HBC and HNC. According to sources, they saw a slight improvement in the number in enquires last week and by the end of the week, we had sales reported at slightly higher levels, with some members of the trade commenting that big-packer prices may be pulling cowhides along for the ride. Overall, it is believed producers likely did not clear their production last week; however, with slaughter levels continuing to run well below levels of a year ago, it certainly does not appear as if this will be a problem for sellers.
As to what we expect this week, this will be a quiet week of trading from our side of the Pond, as the usual practice by producers with representatives travelling is not to offer to the public. In the meantime, we look for the few producers who do not have people travelling to have offer lists similar to last week’s, which means limited volumes and selection offered and we would not be surprised if sellers raised their asking prices. Meanwhile, we fully expect those travelling to meet their fair share of resistance from tanners, especially if they are looking to raise prices.
However, considering popular opinion of the trade is that there are a number of tanners in need of material, it could simply be a matter of being patient for those selling hides. In the meantime, it will be interesting to hear the reports from members of the trade traveling, as we hope to gain a little better insight as to what is really going on in Asia, and especially northern China. While we know the trade in general is hoping to get a better idea of what we can expect for leather business for the remainder of 2014 and early 2015.
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