US Perspective—10.09.19
10/09/2019
www.themaxfieldreport.com
Last week saw the twenty-second edition of the All China Leather Exhibition take place in Shanghai and, according to various members of the trade who attended the fair, it did not appear as if there were as many exhibitors as a year ago. It is also believed the number of visitors attending the fair was slightly lower than a year ago. Reports from the show claim, as expected, that the number of offers from packers at the start was somewhat limited; however, by day two, there were claims that some packers added selections to their lists, to the point where one of the packers was believed to have a full complement of selections offered.
Regarding interest last week, the number of bids showed no improvement compared to the past several weeks. Buyers willing to show their price ideas were looking to buy at levels lower than those last reported, while volumes appeared as if they were limited as well.
As to sales concluded last week, with packers unwilling to negotiate prices and most buyers reluctant to improve their price ideas, there were not many hides changing hands. Popular opinion is that the few hides sold were traded at roughly steady levels; it is highly unlikely packers sold even a reduced week of harvest last week.
In other news, the tanners who had been buying US hides on a consistent basis were mostly shoe tanners and some higher-end upholstery tanners. According to sources, all of these tanners are concerned about the declining Chinese renminbi against the US dollar, which has already added another 5% to the cost of hides. In addition, with the possibility we will see another 5% added to tariffs, it is leading to speculation that this will have a negative impact on demand, especially if prices are not adjusted by those selling hides to account for this additional 5%.
Synthetic alternatives were the big talk of the fair again; however, it is worth noting there were a fair number of tanners who shared their leather orders are “okay”. Tanners are quick to point out that there is no way to obtain any price increase on new orders, and most tanners are booking this business reluctantly, in fear they will lose out to a competitor. Meanwhile, demand for lower-end material continues to be a major concern for tanners, as there is simply not enough overall demand to absorb all of the lower-quality hides being produced each week.
Reports from members of the cowhide trade claim producers started last week in possession of what appeared to be fairly populated offer lists, with most producers opting to keep asking prices unchanged with the past few weeks. Overall, the majority of sources we spoke to reported no improvement in the number of bids compared to the past four or five weeks, although we are aware of one producer who is sharing they enjoyed a busy week of sales at the fair as they were able to write a decent share of business at their last traded levels, which appears to be an exception.
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