German Perspective - 26.01.16
26/01/2016
Everybody has a different explanation, but in the end it doesn’t matter what the reason is: there is not enough leather business around at this stage to keep producers as busy as they want to be. Several people related to the upholstery industry had pretty high hopes for the IMM furniture show in Cologne in mid-January, which used to be one of the biggest events for leather upholstery in Europe. It was also almost impossible to get any clear statement; you find as many people who think that the furniture industry, at least in Germany, will have another good year as those who think the party is already over. Fundamentally our domestic business, at least, should remain reasonably good with the construction business still very busy finishing new apartments that need to be furnished. So far so good, but generally Germany cannot make up for the entire leather upholstery sector.
The general trade tried to raise asking prices last week,as they usually do at the beginning of the year. The first quarter traditionally sees prices rising due to the high season of leather production until it fades quickly when the second quarter begins. Leather prices are actually showing a continuing downward trend and customers are quickly turning away when you tell them that they have to pay more money than in the last quarter of 2015. Consequently there was not much business to be done last week; both sides were postponing final decisions and nobody was in any rush to convince the other of his opinion.
The good news was the easier and quicker arrival of letters of credit from China. That means they need the material to arrive after their reopening following Chinese New Year (which falls on February 8); they did not want to depart for their vacation leaving outstanding contracts pending. However, this applies exclusively to cows, while males at the moment bring no interest. Sales during the week were again pretty limited and nothing spectacular happened. Long-term programmes had to be renewed in Europe, while in Asia people were much busier preparing for the holidays to bother about additional raw material purchases. Prices were pretty much steady or a fraction down for some categories.
The kill: Ice and snow kept production pretty much under control and the main topic to mention is the absolute dominance of dairy cows in the slaughter mix at the moment. Low milk prices are showing their consequences now.
What we expect: It is pretty difficult to find anything that could trigger activity in the weeks to come. In China, this is going to be the last week before everybody closes down for the holiday there and so we just have to hope that some people, who may find that they have not really covered enough for production in March and April, come forward. Unlikely, but possible. For the rest it seems that people will continue their wait-and-see attitude and so it will remain quiet.
| 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 |
Weak |
| 25/29,5 kg | 27,5/28,5 kg | 22/27 kg | 25/26 kg | € 2.00 |
Weak |
|
|
Dairy cows |
15/24,5 kg |
22,5/23,5 kg |
13/22 kg |
20/21 kg |
€ 1.90 |
Soft |
|
25/29,5 kg |
27,5/28,5 kg |
22/27 kg |
25/26 kg |
€ 1,70 |
Soft | |
|
30/+ kg |
33,5/35,5 kg |
27/+ kg |
29/31 kg |
€ 1,60 |
Soft | |
| Bulls | 25/29,5 kg | 27,5/28,5 kg | 22/ 27 kg | 25/26 kg | € 1,95 |
Weak |
| 30/39,5 kg | 36,0/37,0 kg | 24/34 kg | 31/33 kg | € 1.95 |
Soft |
|
| 40/+ kg | 45,0/48,0 kg | 34/+ kg | 38/40 kg | € 1.85 |
Soft |
|
| 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 | € 1.40 |
Soft |
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