German Perspective – 19.09.17
19/09/2017
Automotive tanners continue to be as busy as they have been. They are organising their raw material input according to their needs with a mix between raw hides from their own beamhouses and semi-finished products from traders. Almost nobody is overly happy with the economic results because raw material is simply too expensive if one looks at the cocktail and return of selections one gets.
On the other side, tanners are not interested in major price deviations, particularly on the downside, for fear of triggering major discussions about leather prices. The main focus of activity this week was on abattoir buying and how to fix prices for the month of September.
Major corrections were needed and partial success has been achieved for female hides. Male hides continue to stubbornly resist any adjustment in our region, which could see us struggle in autumn as price reductions begin to take place in other European countries. Consequently, it will be difficult to disconnect from general markets.
Everyone is now waiting for the results from the next trade shows as well as for the results of meetings and discussions about leather orders that are due to be fixed over the next six to eight weeks for the winter half of the year. Furniture upholstery orders are particularly important in terms of volume and price.
The correction of cow prices over the course of the past month has now reached levels at which prices would begin to fit into the calculation range of tanners. At the moment, the majority of cows seem to trade into Asia in the $50-55 range; in normal market conditions, this is the usual comfort zone for upholstery tanners.
Lightweight cows are still finding lots of resistance because they compete more intensively with significantly cheaper origins. The situation is definitely much easier for heavier cows as they can produce a certain quality leather that still has adequate market potential. The biggest problem still seems to be in the market section for males and heifer hides between 25-35kg.
Lighter weights can still benefit from the strong performance and high prices for calf and veal skins, while heavy hides can benefit from the better performance of leathers of heavy substance and the general demand from the automotive industry. However, the hides in between, which are mainly used in standard side leather production, suffer from reduced demand and substantially lower prices in other parts of the world. Fortunately, the production of these kinds of hides in the German market is not particularly high.
We had another pretty quiet sales week. There were some enquiries for heavy cowhides at the start of the week, but it seems our asking prices were out of range. Potential customers must have had better options because they didn’t even get back to us.
In Europe, most of the sales and supply programmes for the month have already been made and there was not much additional demand to discuss. The currency market is still not helping, although the US dollar was trading most of the week below the 1.20 level.
All in all, it was an uneventful week with the main focus on purchasing rather than selling. The little business concluded was either on steady levels or a fraction lower.
The kill: The kill last week continued to rise very slightly. Weather conditions are still quite favourable and there is no need for farmers to rush to sell cattle to the slaughterhouse. The school holidays have ended in all parts of the country and so we expect the slaughter to increase moderately until the nights get really cold, beef consumption increases and farmers are more willing to dispose of cattle.
What we expect: We would be surprised if the doldrums do not continue until the Lineapelle fair in Milan in the first week of October. Not much will happen in Europe so any changes in the next two weeks will come from Asia.
| 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 | € 2,20 |
Weakish |
| 25/29,5 kg | 27,5/28,5 kg | 22/27 kg | 25/26 kg | € 1.45 |
Weak |
|
|
Dairy cows |
15/24,5 kg |
22,5/23,5 kg |
13/22 kg |
20/21 kg |
€ 1.65 |
Weak |
|
25/29,5 kg |
27,5/28,5 kg |
22/27 kg |
25/26 kg |
€ 1,40 |
Steady | |
|
30/+ kg |
33,5/35,5 kg |
27/+ kg |
29/31 kg |
€ 1,35 |
Steady | |
| Bulls | 25/29,5 kg | 27,5/28,5 kg | 22/ 27 kg | 25/26 kg | € 1,80 |
Weak |
| 30/39,5 kg | 36,0/37,0 kg | 24/34 kg | 31/33 kg | € 1.85 |
Steady |
|
| 40/+ kg | 45,0/48,0 kg | 34/+ kg | 38/40 kg | € 1.75 |
Weakish |
|
| Thirds | 15/+ kg | 25,0/27,5 kg | 13/+ kg | 24/26 kg | € 1,10 |
Steady |
| Thirds bulls | 30/+ kg | 38,0/40,0 kg | 24/+ kg | 33/36 kg | € 1.25 |
Steady |
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