US Perspective 12.02.19
12/02/2019
www.themaxfieldreport.com
Interest drew to a virtual crawl last week from tanners in Asia. A number of sources reported that they were able to conclude some business with tanners outside Asia, but the volumes changing hands were low.
Reports from members of the cowhide trade appear as if they mirror those in the big packer trade, with most of the sources we spoke reporting that interest from Asian tanners was nearly non-existent last week, while there were rumblings of a limited number of tanners from other regions looking for hides.
It is highly unlikely that those selling hides were able to liquidate their production last week.
This week, most tanners in Asia will return to their offices and it will certainly be interesting to gauge their interest. In the meantime, the trade in general will focus on the ongoing negotiations between the US and China as the March 1 deadline is looming and there is still no clear indication as to whether or not an agreement will be reached between the two nations. We have a difficult time believing we will see many tanners willing to consider new business at steady levels, especially with uncertainty about additional tariffs come March 1.
Meanwhile, it will also be interesting to see the offer lists of producers this week, as sales over the course of the past two or three weeks have been fairly lacklustre for most. There is a reasonable likelihood we will see offer lists a bit more populated this week.
Between now and the APLF exhibition in Hong Kong (March 13-15) we should be able to get a very good read on demand as tanners are reaching the “home stretch” of their busy season. We suspect we will start seeing members of the trade starting to travel prior to APLF.
We have seen a nice rebound in prices from their recent lows, but we continue to believe that those selling hides may have a difficult time maintaining these prices, as we are not convinced that demand is better than a year ago, while the number of hides produced is higher.
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