US Perspective—16.10.18
16/10/2018
The only other noticeable change was the shipping time on some of the less popular selections. Sources share many of these selections appeared as if they were available for shipment at the end of October, which is a couple of weeks earlier than packers had been stating. This appeared to confirm suspicions that packers perhaps do not possess the sold-forward positions they have been advertising, especially on a few selections.
In other news, it appears the product mix for packers is changing, as a number of sources shared there were more than ample offers of HNS the last couple of weeks, while the number of packers willing to offer BBS is limited. Meanwhile, as mentioned above, the number of heavier-weight hides is on the rise, leading to reports of some packers struggling to ship some of their outstanding regular-weight hides on time.
As it pertains to interest last week, it was certainly an improvement compared to the week prior, which saw Chinese tanners out celebrating their Golden Week holiday the entire week. Overall, we heard from a number of sources that bids were coming from tanners in a number of countries, while the initial price ideas from tanners appeared to be ranging anywhere from $1-$2 lower, to as much as $4-$5 lower. Packers appeared as if they had no interest in countering the aggressive ideas of buyers, while appearing a bit more inclined to negotiate with buyers who had more “reasonable” price ideas.
A number of Chinese tanners were reported to be bidding packers directly last week, accompanied by requests that if they were to conclude business, delivery would have to be before January 1, 2019. It appears there is a growing sentiment amongst Chinese tanners that we will see tariffs increase on US cattle hides, although there is noting in writing to support these opinions.
Reports from the cowhide trade claim producers entered last week with a number of unsold hides, while offer lists at the start of the week did not appear as if they reflected much of a change from the past two or three weeks. Sources report that the number of bids last week definitely reflected an improvement from the week prior, which saw China out all week on holiday.
Many buyers started negotiations with prices several dollars under the asking prices of producers. Buyers with ideas a couple of dollars under the last traded levels of producers apparently saw producers attempting to negotiate sales. Overall, popular opinion of pundits is that last week was not a particularly busy week of trading, as the inability of buyers and sellers to get on the same page as it pertains to prices was a problem. In addition, it appears the trade war between the US and China is also wreaking havoc for export furniture tanners in the northern part of China, and they are huge buyers of cowhides.
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