US Perspective—24.01.17 - leatherbiz: Lea Leatherbiz

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US Perspective—24.01.17

24/01/2017
Last week saw packers with offer lists that resembled those of the last couple of weeks, as they continued their efforts to try to improve upon their last traded levels. Unfortunately for packers, it appears most encountered a considerable amount of resistance to higher asking prices, and with the exception of a couple of isolated sales where packers were laying claims to being able to eke out some incremental increases, the majority of hides appear to have traded at basically steady levels as over the past couple of weeks.

In the meantime, enquires and interest last week were modest at best. Sources report that there were not as many buyers willing to share their price ideas last week, while it appears those willing to pass on bids initially had thoughts of testing the wills of packers and bidding prices lower. Overall, packers refused to take prices lower than the last reported trading levels. Popular opinion of the trade is that there were not nearly as many hides changing hands last week as compared to the week prior, as we know several members of the trade who confirmed they had a poor week of sales last week.

There are continued reports claiming wet blue producers have more than ample offers of unsold product and there are accusations of some producers pressing some of their “old friends” for volume-type business for prompt shipment. In the meantime, we continue to hear that a couple of the packers are not as sold-forward as they usually are on heavier weight HTS, leading to rumours of some very cheap sales last week if the rumours we are hearing are true.

Reports from members of the cowhide trade claim business was not as busy as over the last two or three weeks; however, with the majority of producers in possession of strong sold-forward positions, we doubt this will be an issue for producers.

The selection that continues to receive the lion share of buyers’ attention is HNDC and this is allowing producers to keep prices firm, while interest last week on plump cows (HNC & HBC) was also decent, as it appears buyers of fed HBC have chased prices to levels deemed unaffordable and are now looking for less expensive alternatives.

Some tanners have already closed for their Lunar New Year celebrations and many more will close as we move through this week. It is unlikely that we will see much happening this week, both in terms of sales and any change in prices. That said, we believe that producers will continue to insist that they are well sold, which is likely to mean that offer lists will be a carbon copy of those of the past two or three weeks.

There continues to be a substantial amount of unsold wet-blue hanging around the marketplace and we look for producers to continue their efforts to generate some volume-type business to tanners who have not yet departed for their holidays. Meanwhile, slaughter levels after getting a short reprieve last week are poised to move back closer to 600,000 head this week, lending support to speculation that some producers may need to trade a few hides by the time tanners in Asia return. Meanwhile, we continue to hear rumours that there are leather orders pending that have not been passed on to tanners and will supposedly happen after Chinese New Year. Should this come to fruition, we will see a nice increase in demand and as long as producers can navigate the next couple of weeks, sellers in general may be in line for better demand next month.


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