US Perspective—29.09.15
29/09/2015
www.themaxfieldreport.com
Reports of trading last week appear mixed. Some sources report seeing only a limited amount of interest with the majority of bids $2-$3 under asking prices and with most buyers unwilling to improve their ideas; it appears more business was passed than concluded.
Reports from other members of the trade share that they enjoyed a considerable amount of interest last week.
According to sources, the majority of interest started the week $2-$3 under asking price; however, when buyers found sellers unwilling to consider their aggressive ideas, we understand a number of buyers improved their bids by a dollar or two and sources share that they were pleased with the number of hides they were able to sell.
As far as trading levels, we have heard of sales on HNS at $74-$75, while trading on BBS took place at $72-$73. Meanwhile, HTS traded in a range from supposedly as low as $67, to as high as $70 (limited volumes), while sales on BRS reflected levels as low as $67-$70 depending on brand content, origin and producer. Overall, prices were down $1-$2 last week depending on the selection, while prices over the course of the month are down $4-$5.
Canadian and Chinese authorities confirm that cattle hides exported from Canada other than from Ontario, can be imported into China as long as the importer holds a valid licence. Elsewhere, sources report the highest-grade level of lime splits in the Chinese market have increased in price by 25% in the last month. Sources report that the reason for the increases is that due to poor leather orders, there are fewer hides being soaked, which has allowed tanners to ground the market; they are now able to lay claims to achieving higher prices.
Members of the cowhide trade report interest was slow at the start of the week, however, by the middle of the week, bids began to surface a few dollars under asking prices of producers. Sources report that in the second half of the week buyers slowly started to improve their bids and by the end of the week, the consensus of the trade is that there was a fair number of hides exchanging hands.
With regard to trading levels, we hear that HNDC sold in a range from $57-$60 last week, depending on producer and weight average, while we also hear that some producers were struggling to obtain letters of credit from buyers, forcing some to offer hides for prompt shipment. Meanwhile, trading on HNC reflected levels around $40, while trading on HBC was registered at $32-$33 for northern material and $30-$31 for material in the south.
As to what our thoughts are on the market this week, we tend to suspect sellers are feeling a little bit better about the market as sellers likely liquidated at least a week’s worth of production last week. The offset to this is that slaughter levels are running at their highest levels of the year so producers will want to keep product moving.
In the meantime, we look for sellers to keep asking prices in line with last week’s, while we also tend to believe we could see a few more Chinese tanners in the market this week. In addition, the window of opportunity for tanners to buy some of the best hides of the year is slowly closing. This, coupled with the fact that current trading levels are running nearly 40% lower than their all-time record highs last fall, in our opinion offers tanners a decent opportunity to replenish some of their higher-priced raw stocks.
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