German Perspective – 02.10.18
02/10/2018
All remained as it was before and the show was a copy of many previous editions. There a slow start on the first day, until lunch time when most visitors arrive and pleasantries are exchanged. The second day sees the peak activity period, while the last one is for leftovers before everyone begins to escape around lunch time.
This time, the focus was mostly on demand in general, rather than on particular leather types. We are learning that the show is less and less the showcase for new articles, rather a meeting point with a few eye-catching pieces here and there. The real trend-setting decisions are now made in the design departments of the brands and labels, who then transfer their requests to their suppliers, who don’t change so much anymore. The big cycles between nappas and prints don’t happen anymore, or are substituted with alternative materials.
Drawing a line as far as fashion and leather is concerned, we did not see much news. The luxury groups continue to be strong and this keeps high quality raw materials, led by veal skins, as the strongest performers. In addition, all types of leather which are kept natural and are of use in high-end fashion enjoy stable and reliable demand. High fashion specialties, which are not necessarily made from bovine material, are also far away from any crisis.
The Lineapelle show is only frequented in small part by the commodity producers. A lot is talked about this sector, but only a small number of exhibitors cover it. One can understand the frustration of many when representatives of price-oriented online sales platforms visit to sniff around the trends with the intention of putting cheaper versions of them online, ones which will most likely not be made from leather.
We are not sure, but we would say that the number of visitors from Asia was significantly lower compared to previous years. The statistics will show if this was really true. On the stands, several exhibitors were complaining about reduced order volumes and a number of clients delaying orders and decisions. There are various reasons for this. Some pretend it is related to the trade war and the uncertain global economic situation. Some believe it is a real decline in demand. Some think that the leather buyers are waiting because they expect there to be further declines in leather prices. Whatever the reason, nobody is scared of losing supply.
The fundamentals remain intact. The lower the quality, the bigger the oversupply of raw material. With no indication that the consumption of leather will rise in the near future, the situation is increasingly comparable to the ovine sector, where the only solution is destruction. Nevertheless, there is still leather production and this requires raw material supply.
Sales for the regular programmes have been concluded. Males found their regular takers in normal volumes, while prices had to be adjusted by a few cents. Cow business was limited and one could choose from horror stories about prices to people claiming that the cow market had grounded. Regardless of who is right, it seems that a stable balance for the weeks to come has still not been reached. There is always somebody who has another load to sell.
The kill: The kill has now levelled out. Temperatures are still reasonable and the rain of the past week offers grass a last chance, which farmers will take. The kill is still far more on females than on males. The weights of cows, in particular, remain low.
What we expect: The scientific logic of supply and demand is still valid. The global surplus of commodity hides remains massive. The market for specialties, high quality and luxury-related hides is in balance; the moderate price adjustments are no more strategic rather than a real necessity. With the general market conditions and budgets for the coming months having been made, pressure persists in the low end.
| 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 | € 1,10 | Stable |
|
|
Dairy cows |
15/24,5 kg |
22,5/23,5 kg |
13/22 kg |
20/21 kg |
€ 0,90 |
Weak |
|
25/29,5 kg |
27,5/28,5 kg |
22/27 kg |
25/26 kg |
€ 0,70 |
Weakish | |
|
30/+ kg |
33,5/35,5 kg |
27/+ kg |
29/31 kg |
€ 0,60 |
Weakish | |
| Bulls | 25/29,5 kg | 27,5/28,5 kg | 22/ 27 kg | 25/26 kg | € 1,60 |
Weak |
| 30/39,5 kg | 36,0/37,0 kg | 24/34 kg | 31/33 kg | € 1.60 |
Stable |
|
| 40/+ kg | 45,0/48,0 kg | 34/+ kg | 38/40 kg | € 1.50 |
Stable |
|
| Thirds | 15/+ kg | 25,0/27,5 kg | 13/+ kg | 24/26 kg | € 0,60 |
Weak |
| Thirds bulls | 30/+ kg | 38,0/40,0 kg | 24/+ kg | 33/36 kg | € 0,80 |
Steady |
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