What happened this week: Another week has passed and we are now rapidly approaching the end of the third quarter of 2017. When we consider that December is shortened in terms of business, there are only eight to 10 weeks in the books before another year comes to a close. Nevertheless, this is generally the busy time for the industry.

In our part of the world, the winter half is offering higher slaughter. It is also generally the period when leather producers are working at full capacity and most of their annual turnover is generated. The Asian industry is normally beginning its cycle. The shipping periods mean lead times are generally much longer and the industry needs raw material not only for seasonal production, but also to ensure that domestic demand for the Chinese New Year holiday can be met.

We have actually seen very little of it this year. Asian buyers have been quiet throughout the summer and in recent weeks they have not displayed much appetite for European hides. This is not a real surprise because we have to accept that leather business and tanning capacity in China are shrinking. There has also been abundant supply at much more attractive price levels from other origins, in particular from the US. As a result, business has been quite limited and not active at all in any volume. It seems the industry is again in a period of restructuring, which the European quality tanning industry is currently taking good advantage of.

After the summer break, the European industry has resumed activity and production is at fairly normal levels. This means that quite a bit of business has returned to our part of the world. Some tanneries might have acceptable volumes of business despite the general problems of the industry.

It is not enough, however, to absorb all the raw material being produced around the globe. This results in continuous pressure on prices for mainstream raw materials and an ongoing struggle to achieve a regular, consistent outflow of raw material to the tanning industry. The problems in the industry are not equally spread and so opinions about market issues differ from supplier to supplier and from origin to origin. Many in the industry remain convinced that there are not any serious problems.

The picture from China is slightly different with rumours of financial problems and scattered desperate sellers. In a little over a week, the trade will once again meet at the Lineapelle exhibition in Milan, which may be the occasion to have more intensive discussions about the state of the industry, rather than just scratching the surface as was the case at the All China Leather Exhibition (ACLE) in Shanghai.

Abattoir prices have shown some consideration of the market and currency situation for the first time. This is more the case for female hides and not enough for male hides, but a first step is better than no step. Business this week was once again completely focused on Europe.

There is contact from buyers in Asia, but, at least in our case, we have not been able to generate any kind of serious interest. This has been the situation for more than two weeks. One begins to wonder if the Asian buyers really need more raw material at the moment. Prices were lower for cows and heifers and steady for males, although we expect this is just postponing the correction rather than avoiding it.

The kill: After a decent rise in the kill, the trend took a sudden dip this week. We have no idea why it happened, but the numbers fell suddenly. We must now wait for the new week to find out whether this was just an interruption or if we will have to wait for a serious fall in temperatures before the number rises again.

What we expect: European customers seem to have filled their current requirements. It remains to be seen whether Asian buyers are willing to react or if they are waiting to see the market trend after Lineapelle. It is difficult to form a more positive opinion before the exhibition. 

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	€ 1.60	Weak
	25/29,5 kg	27,5/28,5 kg	22/27 kg	25/26 kg	€ 1,35	Steady
	30/+ kg	33,5/35,5 kg	27/+ kg	29/31 kg	€ 1,30	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	€ 1.80	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	Weakish
Thirds bulls	30/+ kg	38,0/40,0 kg	24/+ kg	33/36 kg	€ 1.25	Steady