German Perspective - 19.11.19
19/11/2019
Total leather demand has significantly declined and this has been the trend for several years now. Following the shoe industry’s lead, leather consumption has shrunk and this trend has been unevenly spread over the entire offer of raw materials.
Low-grade hides are struggling to obtain sales prices that cover collection and processing costs while cows and heifers have established a very stable and solid price-quality ratio. For male hides the situation is a bit more complicated because the fresh and chilled uniform quality production find sufficient interest and demand from the European tanning industry, while any surplus struggles to find customers. Tanners overseas do not need to pay the same price levels obtained in Europe because they are not producing the leather types for which this kind of raw material is required or compensated for by the price tanners can command for their finished leather.
In simple terms, there is adequate interest and sales potential for female hides, while for male hides a certain section struggles. This does not apply all over Europe, because we have regions where the prices are more adequate than in Germany.
Since we are already well into the winter season most of the tanners are already reasonably well covered for a period of time. While European tanners are most likely safe with their purchase programmes until the end of the year, their Asian colleagues are safely covered until the Chinese New Year break (January 25). Origins with an attractive qualityoprice ratio have even today the chance to extend their sales, because many leather producers will find the margins attractive if they have sufficiently full order books.
With abundant supply, buyers can pick and choose; sellers have to realise that too much ambition on price is quickly sanctioned with disappearing interest. Sales for the week were rather spotty with some interest in cows and heifers across the full range of weights. In Europe sales were limited once again to renewals of the standard programmes.
The kill: The kill is pretty good now and numbers have reached a solid seasonal level. The ratio of males continues to fall while at the same time the average weights are significantly higher than before. With the Christmas season ahead of us it is pretty likely that we will see the same scenario for the next four to six weeks.
What we expect: We have absolutely no reason to expect any substantial change. We will be interested to learn when Chinese customers are willing to seriously discuss second half of December shipments for arrival after their holidays and to see what they will pay.
| 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 | € 1,20 |
Stable |
| 25/29,5 kg | 27,5/28,5 kg | 22/27 kg | 25/26 kg | € 0,65 | Stable |
|
|
Dairy cows |
15/24,5 kg |
22,5/23,5 kg |
13/22 kg |
20/21 kg |
€ 0,65 |
Stable |
|
25/29,5 kg |
27,5/28,5 kg |
22/27 kg |
25/26 kg |
€ 0,50 |
Stable | |
|
30/+kg |
33,5/35,5 kg |
27/+kg |
29/31 kg |
€ 0,45 |
Stable | |
| Bulls | 25/29,5 kg | 27,5/28,5 kg | 22/ 27 kg | 25/26 kg | € 1,15 |
Pressure |
| 30/39,5 kg | 36,0/37,0 kg | 24/34 kg | 31/33 kg | € 1.15 |
Stable |
|
| 40/+ kg | 45,0/48,0 kg | 34/+kg | 38/40 kg | € 1.05 |
Stable |
|
| Thirds | 15/+kg | 25,0/27,5 kg | 13/+kg | 24/26 kg | € 0,30 |
Stable |
| Thirds bulls | 30/+kg | 38,0/40,0 kg | 24/+kg | 33/36 kg | € 0,40 |
Weak |
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