US Perspective - 24.02.15
24/02/2015
Courtesy of The Maxfield Report
www.themaxfieldreport.com
Last week was a lost week of trading with the majority of Asia tanners out on holiday. Numerous sources reported to have had “dribs and drabs” of business from their respective customers; however, the vast majority of interest was for only minimal quantities.
Overall, popular opinion of the trade is that although we saw the lowest non-holiday week harvest in recent memory, it is unlikely that packers were able to liquidate their production this week. Prices appear no worse than steady but there are plenty of rumours that many sellers were willing to consider bids a couple of dollars under the last reported trading levels if the buyers were able to load product immediately. These are only unconfirmed rumours, although, with other members of the trade, we tend to believe that there is likely some substance to these reports.
For the most part, we would say the market held steady over the Chinese New Year holiday, although we do not question that there have been some sales concluded at levels under the last reported trading level for product that can ship immediately. The good news for sellers is that by the middle of this coming week, most tanners will have returned from the Chinese New Year Holiday and this would lead one to suspect that we should see an improvement in interest. In addition, this week’s harvest number is one of the smallest numbers in recent memory and with packers sharing that they do not expect much of a change in next week’s harvest, we suspect sellers will again attempt to leverage the supply argument to buyers.
In the meantime, the question remains: how is the leather business for tanners? Many members of the trade who claim they are close to this situation insist that orders continue to fall short of levels of a year ago. We are roughly 2/3 of the way through what most consider the “busy season” and unless the brands are sitting on leather orders, we continue to struggle to see any real upside in the market. That is why we are leaning towards the opinion it is likely we will see a stand-off soon between buyers and sellers.
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