German Perspective – 10.12.19
10/12/2019
Year-end inventories are these days very well managed and the majority of tanneries do not want to have more hides in their factories than they actually need. This is true in Europe in particular, because most of the business there is based on the just-in-time concept. Considering these conditions the business activity is exactly the same as in the previous weeks. For the year 2019 the tanning industry has already closed its books, raw material is planned and secured and supply programmes and logistics are organised. This keeps production departments busy, but the commercial departments are already in a mode of wrapping up or discussing the start of the new decade at the beginning of January. The main interest in the selling and purchasing departments is in the price trends of the first quarter of 2020.
From what we see and hear the market for mainstream articles continues to be in a very fragile balance. The majority of the supply chain agrees that this fragile balance should definitely not be disturbed and with only three or four months to go until the current production season ends there is also agreement that it would be wise to wait until there is a clearer picture about the future.
We still have to deal with too many unknown factors, mostly related to politics. We will soon know if the next level of tariffs in the trade war between China and the US will be implemented and it may not be much longer before we know what is going to be the next step in the endless story around the Brexit.
We can take some confidence from rumours and reports from China. It seems that general production activity is better than expected and some of the excess hide stocks that sat in warehouses over the summer are beginning to clear. However, prices are so low that for many raw materials an adequate return can still not be achieved. It could be a start, though.
We can call the market steady for standard female hides. For the male section the just-in-time fresh and chilled hides on offer can also be almost completely cleared. The two-week closure for the season will definitely be a challenge, but as the holidays are placed it will certainly not create too much of a surplus.
The kill: The kill remains pretty heavy and what used to be slaughtered in October or early November is coming in now. Weights continue to be impressive too and we remain impressed by the mix and the reduced numbers of males. Under normal conditions this should continue until Christmas week.
What we expect: Only speculation and intentional action could really change the present market pattern. The fundamental facts of supply and demand will not allow any stronger price variations.
| 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 |
€ 0,55 |
Stable | |
|
30/+kg |
33,5/35,5 kg |
27/+kg |
29/31 kg |
€ 0,50 |
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 | € 0,27 |
Stable |
| Thirds bulls | 30/+kg | 38,0/40,0 kg | 24/+kg | 33/36 kg | € 0,40 |
Weak |
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