US Perspective—13.11.18
13/11/2018
www.themaxfieldreport.com
Members of the US big packer trade claim the week started off with most sellers seeing a fair number of bids, somewhat comparable to the previous week. Unfortunately, the majority of bids were at levels well below the asking prices of packers. It is highly unlikely that packers were able to liquidate their production last week, especially in light we saw another large harvest at 640,000 head.
There were numerous rumblings of cheaper sales being concluded by packers with some of their “old friends” in an effort to allow buyers to average down their older, more expensive contracts. As expected, packers are doing their best to bury these sales, as they certainly do not want the rest of the trade to be aware of this business.
Reports from overseas claim offer lists in general this week were unchanged with the exception of numerous offers of jumbo and super-jumbo hides (several selections). In addition, it appears there are also plenty of HNS for sale as well as several selections of wet blue hides.
Elsewhere, reports from the shoe trade of orders for better-quality leather for the domestic market appear decent, while export orders for lower-quality orders have declined substantially. Overall, most shoe tanners continue to insist that leather orders for the fourth quarter are not measuring up to levels of a year ago and there are already comments shared by tanners that they will be taking extended time off over the Christmas and New Year, as well as during the Chinese New Year at the start of February.
Pollution problems in Hebei continue. Sources share that the government has cut power to a number of tanners as cities there are experiencing issues with haze and fog. As a result, interest for cowhides in this part of China remains dismal, while it is widely known there is more than ample offer from other producers of cowhides from various countries around the globe. This coupled with the trade war with the US is wreaking havoc on orders for many furniture tanners.
As to leather business for automotive tanners, sluggish automotive sales in September and October in several parts of the world, are sending a warning message to Chinese auto tanners; especially amid announcements from a couple of large European auto tanners that they have reduced their soaking levels. In addition, there are rumblings that one of the large US auto tanners will also be reducing soaking levels, pointing to declining automotive sales.
We suspect the chatter about Chinese tanners looking for hides for delivery before January 1 has run its course and will be interesting to see over the next couple of weeks how much interest comes in. In the meantime, it does not appear as if harvest levels are easing any time in the near-term, although packers will catch a bit of a break the week after next with the Thanksgiving Holiday. As to some thoughts for this week, it is very likely that we will see large numbers of heavier-weight hides and various wet blue selections.
Share this story:
