German perspective - 09.07.19
09/07/2019
This year we have to believe that only a very small proportion of the people in the leather sector are leaving for the holiday break with a neutral or positive feeling about the business and its future. Some still enjoy a decent volume of orders at reasonable prices and a small minority are fortunate enough to be able to take full advantage of the falling raw material market. Well, they definitely deserve it, because they must have done something right to be in this position. For the rest it might be a challenge to really relax during the break, because too many challenges are lying ahead for owners and managers.
The biggest challenge for a hide trader is, on the one hand, to find sufficient customers for the material, to make sure that they get paid and to take decisions on how to handle the surplus and the low prices that we have to expect still for some time to come. For packers this might not be such a big issue because they have to get rid of the by-product no matter how. The number of hides that are surplus to continues to rise with every one-cent fall in prices. What for years might have been considered a chance to buy has now become a burden today.
One can hear more news every day about tanneries cutting production or extending the holidays. This means that demand will be below usual levels until at least the end of August. It seems unlikely there will be any boost in demand after the holidays. The usual replenishment of inventories before the summer holiday in preparation for the re-start has not taken place yet this year, nor is there much hope of it happening at all. No tanner wants to have more inventory than necessary and most are possibly even suffering from having too much at the moment. There are also not many people around who do not believe that they could get material on the spot in September.
Trading this week was once a carbon-copy of the previous weeks. Wherever delivery programmes of fresh hides before the holidays are still needed, it was done. This was only topped up by sporadic interest from China for premium hides. For the premium quality it was also possible to get steady prices. For the rest, for the simple bread-and-butter stuff, the bits that we saw were not really serious, just the usual bottom-fishing by the usual suspects. Consequently sales cannot be called sufficient. For this amount of business, not even the recovering US dollar could offer much help, but these days even little is better than nothing.
The kill: As far as the kill is concerned there’s really not much to report. In our region the school holidays have started and so the numbers are going now and will soon reach the lowest point of the year. The cattle herd in Germany has fallen by roughly 3% and the kill has been down in the first half of the year in small, single-digit numbers
What we expect: We cannot expect anything other than the usual repetition of the same, just with falling volumes. There is little activity in Europe and in Asia we can only hope that tanners still need still to replenish.
| 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 | € 1,40 |
Weakish |
| 25/29,5 kg | 27,5/28,5 kg | 22/27 kg | 25/26 kg | € 0,70 | Weakish |
|
|
Dairy cows |
15/24,5 kg |
22,5/23,5 kg |
13/22 kg |
20/21 kg |
€ 0,65 |
Weaker |
|
25/29,5 kg |
27,5/28,5 kg |
22/27 kg |
25/26 kg |
€ 0,50 |
Weaker | |
|
30/+kg |
33,5/35,5 kg |
27/+kg |
29/31 kg |
€ 0,45 |
Weaker | |
| Bulls | 25/29,5 kg | 27,5/28,5 kg | 22/ 27 kg | 25/26 kg | € 1,20 |
Weaker |
| 30/39,5 kg | 36,0/37,0 kg | 24/34 kg | 31/33 kg | € 1.25 |
Weaker |
|
| 40/+ kg | 45,0/48,0 kg | 34/+kg | 38/40 kg | € 1.10 |
Pressure |
|
| Thirds | 15/+kg | 25,0/27,5 kg | 13/+kg | 24/26 kg | € 0,30 |
Weakish |
| Thirds bulls | 30/+kg | 38,0/40,0 kg | 24/+kg | 33/36 kg | € 0,45 |
Weak |
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