German Perspective - 19.02.19
19/02/2019
One cannot consider this to be any surprise, because the real return of the decision-makers and the restart of production will only take place this coming week. Clients in Asia look for better hides at lower prices or at any kind of super bargain in the low-price and low-quality sections. This makes pricing very difficult.
Brexit is getting closer and barely anyone has an idea what will really happen and how this will influence the hide market. There is really nothing prepared and unless the present legislation tying the United Kingdom and the European Union together is just kept in place there is absolutely no preparation for anything. Most people say things will continue as before, but knowing vets and public officers, in combination with the audit and certification maniacs inside companies, this seems unlikely. Everybody has an opinion, but nobody has any facts. So, it needs very little to bring everything to a halt.
There are also other aspects influencing the situation. The beef scandal in Poland has had a direct impact on the kill in that country and is sending shockwaves into the main export markets. The sharp decline in the soak at the main lime splitting tanneries in Europe is beginning to worry collagen producers. Will production come back? Is there an option to use hides that cannot find a market any more? Will bovine collagen lose market not only due to supply, but also due to reduced demand? Will substitutes have to be developed?
When it comes to demand for leather, it is difficult to find any positive news. Many are travelling to the Lineapelle Fair in Milan this week and would love to see a breakthrough in leather demand. Cheaper raw material prices will allow tanners to offer more attractive price levels for the coming season. But, as already mentioned above, sales were once again like pulling teeth and accompanied by endless price discussions. Cows have certainly found their level, but males are still struggling to trace a clear and stable valuation. The weaker euro has helped a bit here and there, but prices for females were steady while males can only be moved with discounts.
The kill: The kill continues to be relatively slow, which is not unusual for this time of the year. There is also a clear trend towards more heifers in the mix with a relative reduction in lighter-weight males. Weights continue to hover around the peaks of the year. We should see more of the same also in the coming weeks.
What we expect: This week should be a bit more active. Chinese tanners are back, many of the industry will meet in Milan and will gather information and opinion. We still see the market in a period of transition and re-valuation of leather and hide types. Price matters so much, and this makes us believe that females are correctly valued while males need still to find a new and realistic price grid.
| 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 | € 1,60 |
Stable |
| 25/29,5 kg | 27,5/28,5 kg | 22/27 kg | 25/26 kg | € 0,90 | Stable |
|
|
Dairy cows |
15/24,5 kg |
22,5/23,5 kg |
13/22 kg |
20/21 kg |
€ 0,70 |
Stable |
|
25/29,5 kg |
27,5/28,5 kg |
22/27 kg |
25/26 kg |
€ 0,60 |
Stable | |
|
30/+kg |
33,5/35,5 kg |
27/+kg |
29/31 kg |
€ 0,55 |
Stable | |
| Bulls | 25/29,5 kg | 27,5/28,5 kg | 22/ 27 kg | 25/26 kg | € 1,40 |
Weak |
| 30/39,5 kg | 36,0/37,0 kg | 24/34 kg | 31/33 kg | € 1.40 |
Weak |
|
| 40/+ kg | 45,0/48,0 kg | 34/+kg | 38/40 kg | € 1.25 |
Weak |
|
| Thirds | 15/+kg | 25,0/27,5 kg | 13/+kg | 24/26 kg | € 0,35 |
Stable |
| Thirds bulls | 30/+kg | 38,0/40,0 kg | 24/+kg | 33/36 kg | € 0,60 |
Weakish |
Share this story:
