US Perspective—28.07.15
28/07/2015
www.themaxfieldreport.com
Reports from members of the big packer trade laid claims that interest and business picked up towards the end of last week after a slow start. Popular opinion of the trade is that prices have at least started to exhibit some signs of stabilising, which we suspect is welcome news to sellers who have seen prices decline by approximately 33% since the APLF exhibition in Hong Kong at the start of April (using the value of HTS).
Sources report that some sellers saw so much interest in hides at the end of the week that they opted to remove some selections from their offer lists, while other sellers were reported to have increased their asking prices. As to the number of hides exchanging hands this week we are leaning towards the opinion that sellers likely at least sold their production. Meanwhile, in terms of prices, although there are some members of the trade who will insist that they can sell at higher levels, we are of the opinion prices for the most part are unchanged from levels of a week ago.
Reports from overseas are claiming a noticeable improvement in the number of bids this week on packer hides. In some instances, sources share that buyers who were looking to buy at levels under the last reported trading levels immediately improved their ideas once they were appraised sellers had no interest in chasing their lower ideas. Good news for those selling hides is that we are hearing there is an improvement in the number of letters of credit coming in the past two weeks and this too is helping to boost the morale of those selling hides.
Now that the market has exhibited signs of stabilising, it will be very interesting to see how sellers play this moving forward. Already, we have heard from a few isolated members of the trade who are ready to proclaim a “bottom” has been reached and the market is now poised for recovery, especially considering the number of buyers who purposely delayed purchasing decisions as the market rapidly declined. Unfortunately, we do not believe that things are this simple. Although we tend to agree that sales have been decent for the past two or three weeks, we tend to believe that many of these sales were “solutions” to problems that many of those selling hides were facing.
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