US Perspective—23.08.16
23/08/2016
www.themaxfieldreport.com
Packers saw a continuation of decent interest from tanners and there were a considerable number of hides changing hands. In fact, we have heard from some packers that they have sold enough hides and as they look forward, their intentions heading into this week are to start to press for higher prices, especially on the more popular selections.
The majority of hides sold were traded at steady to 50 cents lower, with decent quantities. As a result, many packers tried to raise asking prices by a dollar as we moved toward the end of the week. This was not received well by buyers and this basically resulted in business slowing as we reached the end of the week; buyers decided that they wanted to wait until this week to see what their many visitors will offer before agreeing to pay more for hides.
There continues to be speculation that producers of wet blue hides are still struggling and according to last week’s USDA Export Sales Report, outstanding sales of wet blue are the lowest of the year. In the meantime, we are hearing numerous reports of producers of wet blue aggressively seeking bids and some members of the trade are leaning towards the opinion that packers will have their work cut out trying to raise wet salted prices until this overhang of wet blue is sold.
Reports from the cowhide trade claim sellers enjoyed another decent week of interest and with many producers enjoying stronger sold-forward positions; it appears many producers were able to achieve an increase in price of roughly a dollar per hide. Overall, volumes sold last week were decent; leading to thoughts that it is likely we will see producers try to raise their asking prices again this week.
With so many people travelling in Asia this week, it is unlikely that we will see many “public” offers, as the usual modus operandi is for producers to allow those who are travelling to be the ones offering to the customers they are visiting. In the meantime, we could see one of two scenarios playing out this week. Either we will have a week where producers will assume a firm posture and attempt to convey that prices have bottomed and the market is poised to move higher, or producers will refrain from offering, claiming to have sold too many hides over the past couple of weeks and gauging the reaction of tanners.
It will also be interesting to hear the first hand reports of those travelling in order to see exactly how busy tanners are and how many drums are turning. In addition, we are very interested as to the raw material inventory of tanners as well as how much finished leather is sitting in their warehouses. It will also be interesting to see if those travelling also get the impression that the leather business is exhibiting signs of improving as the entire trade is looking for next week’s All China Leather Exhibition to offer a better indication of what we can expect for the remainder of the year.
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