German Perspective - 9.1.18
09/01/2018
However, the last chapter of the history book has not been written yet and, with the great success leather still has in fashion and luxury, it might just need a few good ideas to reverse the trend.
For the moment, however, we are dealing with mainly negative factors. The Christmas season was pretty quiet but by Wednesday the new Year really started and activity gained momentum. Bids from Asia became plentiful and specific interest was noted from Europe.
However, it was not easy with the overseas destinations. Buyers continued to bid prices down. They obviously did not realise what the currency did and the almost 2% decline of the US dollar made the calculations even tougher than before the holidays. It was clear that higher prices would not be paid to compensate, but lower ones were impossible as well. That limited the activity and only a few sales were made.
In those cases, it was obvious that there are tanners who had been waiting too long and need desperately to take care of their procurement and shipment for the time right after Chinese New Year. The buyers for upholstery have become more quality conscious and selective in their picks of suppliers and materials, which does not make it easy to clear the full range of cows.
In Europe the big players were still absent as they have covered their requirements for January. They will not return to the market before next week. The smaller and niche producers were present, confirming that where leather is still something special the 'real thing' continues to perform well. Returns were steady or a fraction lower due to the currency situation.
The kill: The kill was low and numbers were small. This doesn’t come as a surprise, but the extent was more than expected. It seems that this will continue for a while although numbers should recover with the full production weeks ahead. Weights continue to be seasonally high.
What we expect: We are interested to see what the next week is going to offer. Last week was either just a flurry of interest after the break or there is more replenishment needed, which should result in a good market performance for the start of 2018. The lower kill will support suppliers, but it doesn’t seem that tanners are considering any price rises. There is still enough to choose from rather than surrender and pay more for raw material.
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