German Perspective - 05.03.19
05/03/2019
Since the premium section of the industry dominates the exhibitors at these shows, the average impression might have been more positive than the general industry situation. In fact, many had to return to bread-and-butter business, and this is absolutely not the same.
With the uptick in interest in January, the expectations for the fairs and the lower kill in Europe, many were hoping for a widespread recovery. We assume they have been disappointed. The mainstream markets in Asia have remained unimpressed and were far from being excited about higher leather orders. It quickly became clear that volume buyers of standard material were far from willing to jump on the bandwagon of higher prices and general enthusiasm. Most buyers from Asia have made it clear that they were not prepared even to think about higher prices. They have sent higher price ideas into the desert and would not even bother to talk about them. It was even a struggle to convince the few interested parties to stick to unchanged prices.
This has to be considered as a signal that tanners are neither short of raw material nor afraid that they will need to pay more money eventually. The main reason might be that there are still quite a number of offers circulating at steady and even lower prices. Always when one believes all the cheap hides and stocks have been absorbed by the market and a balance has been achieved, suddenly new offers turn up. There still seems to be enough salted stocks across Europe looking for a home, but these are not really favoured by the quality tanners in Europe.
One thing seems to be clear. There is no change in global leather demand, so why should there be any rise in raw material needs?
Business in the week after Milan was coincidental. Selected quality hides were selling in small volume. Males continue to struggle for price reasons and, for cows, a fraction more was paid in Europe while Asia was pretty firm on ideas that were at the same levels as several weeks ago. So, most is just sidestepping and the existing stocks of hides, which are too expensive in relation to international levels, fail to find the interest needed to clear them up. In total we would not call it a great week of sales.
The kill: We have just reached the carnival season and so this week and next will not offer big numbers. Beef sales remain difficult and prices are under pressure. Forecasts for slaughter in Germany predict a decline of more than 3% for bulls and around 1% for cows for 2019. We would have expected a larger decline for cows after the kill of 2018 and the drought.
What we expect: In Europe activity will be slow due to the carnival season. In mid-March everyone will meet in Hong Kong for the APLF exhibition and many suppliers will travel before the event to try to sell in private as many hides as they can before competitors arrive. So, whatever happens, not much will be disclosed for a while and we don’t expect a lot to be reported until after Hong Kong with not much upward potential for prices next week.
| 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 |
Pressure |
| 30/39,5 kg | 36,0/37,0 kg | 24/34 kg | 31/33 kg | € 1.40 |
Pressure |
|
| 40/+ kg | 45,0/48,0 kg | 34/+kg | 38/40 kg | € 1.25 |
Pressure |
|
| 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:
