German Perspective - 27.10.15
27/10/2015
Medium, high-end and top-grade demand has been hit much less by the decline of demand in general, and the seasonal increase in production after the summer break has also helped to move raw material on a reasonably regular basis.
Despite the problems around Volkswagen AG all the other premium manufacturers of automobiles in Germany are still running a stable order book, which is guaranteeing an unbroken demand for premium automotive leathers made in Europe. All this is supporting the demand for European, including German hides. Another positive factor is the return of demand for secure and reliable-quality dairy cow hides, which has increased interest from China for material from reliable sources since the beginning of September, despite the fact that the customers buying presently are mainly located in Hebei province (who have proved not to be the most reliable customer base in 2015).
One has to be aware of the facts here and, obviously, presently suppliers are being chosen because they have not a bad record with customers. Many of the real buyers are camouflaged by importing organisations, who are the ones opening the letter of credits on behalf of the real buyers. This can make it difficult to pick out customer who, perhaps, should not be served any more because of previous behaviours.
Unfortunately, as the industry still has no platform for registering certain incidents, it is still possible for bad performers to shift from one supplier to the next, giving new suppliers no reason not to sell to customers who have let colleagues down. This might also be the reason why there is so much demand for dairy cows. Anyway, we consider the big spread between origins and hide types to be the major issue to deal with when it comes to any kind of predictions for the trend of the market over the coming months.
The next interesting stop on the road is definitely the upcoming holidays, the Christmas break in Europe and Lunar New Year in China. Product flow will be slowed down for quite some time and it remains to be seen if this can be compensated for by extra sales and shipments after the break.
Sales this week have been adequate and, with the assistance of the renewed fresh hide programmes and the firmer US dollar, enough interest in sales were generated to clean up the available quantities. With the exception of salted males below 40 kilos, which are far too expensive in international relations, all other hide types have found enough interest to be sold. Prices were fractionally lower for male hides and fractionally higher, because of the US dollar influence, for females.
The kill: We are still not excited about the numbers and the seasonal kill seems to have started later than ever before. Only the number of bullhides went up slightly, but nothing spectacular.
What we expect: We would say that the market for males continues to remain under moderate pressure because there is not enough support from overseas and values remain pretty high. The market for cows has definitely found a bottom and the firmer US dollar will, as usual, have a positive influence on these type of hides. We will have to wait and see if this can be sustained.
| Type | Weight range | Avg. green weight | Salted weight | Avg. weight salted | Price per kg green weight | Trend |
| Ox/heifers | 15/24,5 kg | 22,0/23,5 kg | 13/22 kg | 20/21 kg | € 2,30 |
Steady |
| 25/29,5 kg | 27,5/28,5 kg | 22/27 kg | 25/26 kg | € 2.00 |
Steady |
|
|
Dairy cows |
15/24,5 kg |
22,5/23,5 kg |
13/22 kg |
20/21 kg |
€ 1.90 |
Steady |
|
25/29,5 kg |
27,5/28,5 kg |
22/27 kg |
25/26 kg |
€ 1,60 |
Steady | |
|
30/+ kg |
33,5/35,5 kg |
27/+ kg |
29/31 kg |
€ 1,55 |
Steady | |
| Bulls | 25/29,5 kg | 27,5/28,5 kg | 22/ 27 kg | 25/26 kg | € 2,00 |
Weak |
| 30/39,5 kg | 36,0/37,0 kg | 24/34 kg | 31/33 kg | € 1.95 |
Weakish |
|
| 40/+ kg | 45,0/48,0 kg | 34/+ kg | 38/40 kg | € 1.85 |
Weakish |
|
| Thirds | 15/+ kg | 25,0/27,5 kg | 13/+ kg | 24/26 kg | € 1,35 |
Soft |
| Thirds bulls | 30/+ kg | 38,0/40,0 kg | 24/+ kg | 33/36 kg | € 1.45 |
Soft |
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