US Perspective - 5.9.17
05/09/2017
www.themaxfieldreport.com
Most people we spoke with at the All China Leather Exhibition (ACLE) were disappointed with the show, as the consensus is that the number of visitors was lower than a year ago.
Members of the trade looking to conclude business report a difficult week of trading, with few bids available, while the few bids seen this week had buyers for the most part trying to buy hides at lower prices and sellers reluctant to follow.
Sales were difficult to conclude, and sales do not appear to be for any substantial volumes. It is highly unlikely that packers were able to liquidate the slaughter this week, while trading levels were a very “soft” steady.
Many large buyers showed up on the first day of Shanghai fair with intentions accessing the overall situation, and were gone by late afternoon.
This is not unusual, however, many members of the trade said this confirms how lacklustre business is for most, as it only took “decision makers” a few hours to obtain everything they needed to know.
Elsewhere, tanners in China continue to deal with pollution issues and sources report this is a serious problem for many, and it will affect more tanners as we move forward.
Some large tanners said that they would benefit from pollution crackdown, as they have the capital to buy the necessary equipment and they could take some business from those suffering effluent problems.
Side leather business in China remains lacklustre, with some claiming business is down as much as 25% to 30%, or even as much as 50%. Some larger tanners are reporting business is up slightly over last year; however, this is due to them acquiring market share from their competition as opposed to an increase in demand.
Business appears decent for furniture tanners and they were looking for offers of HNDC, and HNC to a lesser degree.
Business appears decent for most automotive tanners; however, many are showing more interest in Australian hides and Brazilian wet-blue hides, as opposed to HNS and BBS.
There was talk of the likelihood European suppliers would be facing downward pressure, as their asking prices on hide selections comparable to US steers were running roughly $10-$15 higher and they appeared as if they had a miserable show. Many pundits are of the opinion prices in Europe are in store for a sizable price correction in the range of 15-20% and possibly even more.
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