German Perspective - 17.04.18
17/04/2018
Once again we in central Europe have little to complain about, because we are still in possession of a wide range of raw material categories that are still performing well. Premium raw materials are not only holding their prices, but are also seeing the balance between supply and demand remain intact. There is a two-tier market; this barely needs repeating. This part of the leather market continues to be in good shape and does consequently not need much attention.
However, elsewhere in Europe we have quite a number of hide types that need to compete with the international supply and belong more to the standard or commodity section. They are suffering like many others around the globe. It is not really a matter of price; the challenge is to find customers who are not only willing to buy but also to honour their contracts in full.
Last week, activity had something of the feel of August about it. If we had leaves on the trees one could have been tempted to think the industry was having an early summer break. Locally, most players were still busy, but activities in the overseas market have been almost nil. Enquiries that had been served with offers went unanswered and, if one was lucky, a reply came on Friday stating that ‘next week will be a new week’.
In Europe the core business continues to run its course. There was not too much to do, because not many contracts needed renewal and so most of the discussion was about the problem of rising stocks of low grades all over. As good as the leather business in Europe might be, here too the low grades are starting to become a problem. Tanners and traders alike are beginning to worry how the low-grade problem can be solved. Tanners talk to potential clients who have other offers on their desks, for commodity leathers at very low prices.
This makes it difficult to sell the low selections of the premium hides; clients don’t want to take them any more. This has become a worry in view of the fact that, in the summer, the chances of an improvement will fade as the temperatures rise.
Trading this week was extremely light. Sales numbers were possibly one of the lowest of the year and only isolated sales of the better and heavier hides were recorded. China was quiet, although here too the better-quality male hides can still find sufficient interest to absorb the kill and production.
The kill: The kill remains unexciting and we are now beginning to enter the low season of the year. Hide weights are slowly starting to decline and cattle will soon return to the fields. We cannot find any argument why there should be any change in the situation and with the upcoming May holidays one has to expect low numbers for a while.
What do we expect: We cannot not see any change in the general market pattern. Leather business is not zero and a good number of tanners continues to run normal production. Hold your clients if you want to move hides, or speculate and believe in a strong recovery of demand before the summer. Lower slaughter will ease a bit of the pressure, but we still feel unoptimistic before the next busy season for leather.
| 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 | € 2,10 |
Stable |
| 25/29,5 kg | 27,5/28,5 kg | 22/27 kg | 25/26 kg | € 1,20 |
Weak |
|
|
Dairy cows |
15/24,5 kg |
22,5/23,5 kg |
13/22 kg |
20/21 kg |
€ 1.20 |
Weak |
|
25/29,5 kg |
27,5/28,5 kg |
22/27 kg |
25/26 kg |
€ 1,00 |
Weak | |
|
30/+ kg |
33,5/35,5 kg |
27/+ kg |
29/31 kg |
€ 0,95 |
Weak | |
| Bulls | 25/29,5 kg | 27,5/28,5 kg | 22/ 27 kg | 25/26 kg | € 1,70 |
Weak |
| 30/39,5 kg | 36,0/37,0 kg | 24/34 kg | 31/33 kg | € 1.70 |
Stable |
|
| 40/+ kg | 45,0/48,0 kg | 34/+ kg | 38/40 kg | € 1.60 |
Stable |
|
| Thirds | 15/+ kg | 25,0/27,5 kg | 13/+ kg | 24/26 kg | € 0,85 |
Weak |
| Thirds bulls | 30/+ kg | 38,0/40,0 kg | 24/+ kg | 33/36 kg | € 1.00 |
Steady |
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