US Perspective—22.01.19
22/01/2019
www.themaxfieldreport.com
Reports from the big packer trade claim that interest from potential buyers appeared to slow towards the end of last week, once packers made it clear that they were not willing to negotiate prices.
Sellers still sexperienced another decent week of trading. Comments from the trade believe the interest we have seen in the past couple of weeks are tanners trying to take care of purchases before departing for their Chinese New Year holiday.
Reports from the cowhide trade claim most producers entered the week in possession of much-improved sold forward positions and as a result, had offer lists that were missing a number of selections. Most producers only listed a handful of selections still available for sale, a direct result of improved sales over the past couple of weeks.
Big packer hide prices have gone up by 16% and cowhide prices by 35% over the past couple of weeks; we have seen the most hides sold in quite some time, which is positive news in a trade that has really seen nothing but negatives for the past 18-24 months.
Of course the trade is left to debate as to whether this is the bottom of the market. Hide prices have reached such inexpensive levels that if encouraged, many of the brands might reconsider using leather. It is highly unlikely, though, that two decent weeks of sales back-to-back is enough to address the overhang of unsold hides that has been accruing over the better part of a couple of years.
The overall fundamentals of the market have not changed; we are not aware of leather business exhibiting any substantial sign of improvement for tanners.
Until we see several weeks of consistent interest from buyers, we are not ready to jump on the ‘bull’ bandwagon.
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