German Perspective - 30.04.19
30/04/2019
The most problematic region from our point of view is still China. The lack of leather orders continues and is actually becoming worse season by season. One can sense the rising frustration in the majority of the industry. Payments are late, deadlines are missed and interest in hides is minimal. If a bid finds its way into the email inbox, it is often at price levels that have to be considered as being far away from the present market levels. There is simply no real demand and many who bought in the first quarter seem to be missing the leather orders to justify tanning the hides. If they are tanned, then they are stuck in wet blue and in crust and waiting for clearance. Only the large industrial tanners working for the auto industry or a few of the global shoe and handbag brands continue to work on a regular basis and remain the repeat buyers from the origins they prefer.
For the rest, where China has become a commodity outlet market, where clients were always camouflaged by import traders so that only very few direct relations were built up, making it difficult to have a clear insight into the situation of the client and the market in general, a number of bad stories were heard again last week. There are containers said to be stuck in the port with payments uncertain. Some other EU origin hides were quoted at very cheap prices.
Amazingly the cow market got moving again, which nobody really expected. Females seemed to be attractive enough to grab buyers’ attention and they cleaned up production. UK cows were reported to be $2-$3 lower versus prior to Easter, which made them exceptionally cheap among the European options.
In Europe the situation was a bit more stable due to the stability of the adjusted production levels, which we have seen since November. However, the number of stories and rumours about large wet blue stocks continues to increase. It seems that more suppliers than we thought decided to tan surplus material during the winter and hoped for a recovery of demand and prices to release the stocks into the market this spring. The kill hasn’t faded that much yet and the demand hasn’t gone up so many tanners see no reason to buy extra volumes of semi-finished hides and are simply covering production with them if the offers are cheaper than raw hides or if little gaps in certain selections have to be filled.
Time is passing and we have only eight or ten weeks of regular production left before the summer break. It is also not yet clear what is going to happen in July and August with all the hides leaving the abattoirs.
So, there are still a lot of questions to be answered and more than ever a plan B must be developed. Sales this week were patchy again. Interest from China was either for the very cheap or for the very good material, but neither attracted sufficient price bids. In Europe the next renewal of regular programmes is due in the coming weeks, so there was not much help from that source either. This made the week end with sales numbers under par again.
The kill: Another shortened week has cut the weekly number of slaughter. Females continue to dominate and weights begin their seasonal descent.
What we expect: We have no reason to believe that the situation is going to change soon. Keep your clients, take what you can get and make sure that payments come in. That is presently the dominant message, excluding specialties.
| 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 | € 0,80 | Weakish |
|
|
Dairy cows |
15/24,5 kg |
22,5/23,5 kg |
13/22 kg |
20/21 kg |
€ 0,70 |
Weaker |
|
25/29,5 kg |
27,5/28,5 kg |
22/27 kg |
25/26 kg |
€ 0,60 |
Weaker | |
|
30/+kg |
33,5/35,5 kg |
27/+kg |
29/31 kg |
€ 0,55 |
Weaker | |
| Bulls | 25/29,5 kg | 27,5/28,5 kg | 22/ 27 kg | 25/26 kg | € 1,30 |
Pressure |
| 30/39,5 kg | 36,0/37,0 kg | 24/34 kg | 31/33 kg | € 1.30 |
Pressure |
|
| 40/+ kg | 45,0/48,0 kg | 34/+kg | 38/40 kg | € 1.20 |
Pressure |
|
| Thirds | 15/+kg | 25,0/27,5 kg | 13/+kg | 24/26 kg | € 0,40 |
Stable |
| Thirds bulls | 30/+kg | 38,0/40,0 kg | 24/+kg | 33/36 kg | € 0,50 |
Weak |
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