German Perspective - 28.06.16
29/06/2016
In the hide business the immediate reactions were pretty limited. Only the Chinese reacted in traditional knee-jerk manner on Friday morning, asking by how much suppliers would be able to lower their prices and for them please to update all offers. That’s all they cared about, just to see if there was a bargain to be had. However, there does not appear to have been any major immediate reaction from sellers.
Generally, very little happened last week, a situation that has barely changed from week to week for ages now. Everyone knows which types of hide are selling well and the low kill we experience at this time of the year is keeping the balance intact. For all the other types, which are mainly going into the Asian markets, the situation is totally different and has been since the Chinese New Year holidays in February.
European hides are not the premium source for industrial producers in China and the rest of the industry has serious problems with finance and the order situation. This can easily be seen by the shift of production away from China to other destinations. The automotive industry with their scattered production clusters around the globe are determining the product flow and also some of the shoe manufacturers have left China because production conditions are no longer favourable versus other options.
However, the biggest problem is the decline in the total leather demand. For the moment suppliers that can provide a reasonable-quality hide in larger uniform volumes are taking full benefit, because this is still the part for which leather production is running pretty stably and in good volumes. The summer break is coming at the right time. It will allow companies to learn and analyse how the global economy and the demand for leather will be affected when seasonal production restarts in September.
Business and sales this week were mainly related to the regular renewal of long-term contracts, with a bit of interest here and there from China at the beginning of the week. With this and a bit of a lucky hand in the currency markets one was able to keep revenues almost stable.
Overseas buyers are trying to pick around the edges as much as they can and to focus their interest mostly on the heavier side of dairy cows; lightweights they don’t want to know. And they still have a very clear level of price they are willing to spend which seems to be well coordinated in particular between the buyers in the north of China.
The kill: No real changes as far as the kill is concerned and we are now rapidly approaching the lowest season of the year. School holidays have begun, which is also always reflected in the killing numbers. There are still no real solutions to the milk price problem, but it is most likely this issue is going to be addressed soon.
What we expect: We think that next week will be the week when the market in Europe sorts itself out in terms of a new selling price. There is no reason to believe big variations will occur.
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 | € 1.70 |
Stabilizing |
|
|
Dairy cows |
15/24,5 kg |
22,5/23,5 kg |
13/22 kg |
20/21 kg |
€ 1.70 |
Weak |
|
25/29,5 kg |
27,5/28,5 kg |
22/27 kg |
25/26 kg |
€ 1,45 |
Stabilizing | |
|
30/+ kg |
33,5/35,5 kg |
27/+ kg |
29/31 kg |
€ 1,40 |
Stabilizing | |
| Bulls | 25/29,5 kg | 27,5/28,5 kg | 22/ 27 kg | 25/26 kg | € 1,90 |
Weak |
| 30/39,5 kg | 36,0/37,0 kg | 24/34 kg | 31/33 kg | € 1.90 |
Steady |
|
| 40/+ kg | 45,0/48,0 kg | 34/+ kg | 38/40 kg | € 1.85 |
Steady |
|
| Thirds | 15/+ kg | 25,0/27,5 kg | 13/+ kg | 24/26 kg | € 1,30 |
Steady |
| Thirds bulls | 30/+ kg | 38,0/40,0 kg | 24/+ kg | 33/36 kg | € 1.30 |
Steady |
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