German Perspective – 28.01.20
28/01/2020
The situation for male hides is even more peculiar. These hides mostly find a home with quality-end tanners in Europe and their business can just about be called stable. The leather market is still very sensitive, we are right in the middle of the high-production season and prices are fixed for leather for the present. What it is that has triggered a change in the mood and led to a challenge to the market balance achieved after the summer might only be obvious to those who are playing the game.
Aggressive purchasing had been seen here and there, and not only in the German territory. From the meat companies’ standpoint, this is the kind of movement they have been waiting for; any kind of competition for material is immediately seen as an indication of a firmer market trend. Nobody can blame the sellers for taking this position, but tanners are scratching their heads, wondering what is going on. For them it was essential for raw material prices to go down and they needed these prices to stay stable for the rest of the season.
Among European customers, barely anyone has been able to confirm an increase in leather demand beyond the seasonal influences, certainly not in the automotive market. There are small islands where the sun is shining, but they are small enough not to be considered decisive in forming the general market trend.
In Asia it is the holiday season and there was not much interest in evidence as people were happy to leave work behind for a week or two and take a rest. The outbreak of the new Coronavirus in China has come at a bad time and it may still take a few weeks before we know what the impact on the economy and consumption might be. We are at an early stage and it is difficult to see how dangerous this might be in the end.
All in all it leaves the trade with a lot of uncertainties and it looks as though it could become a risky game in our part of the world to test the market under the present circumstances. There is no question that tanners have purchased raw material to keep production flowing well, but they are not desperate.
Last week, tanners in Europe were not willing to consider any kind of significant price rise. They preferred to play for time and postponed decisions. The best response one could get was a fractional increase in prices or one had to take a gamble and to wait for a change of heart. Clients in Asia were not in buying mood either. Attractive prices would have certainly sold some hides, but asking higher levels gave them a good reason to wait until after their Lunar New Year holiday.
The kill: The kill dropped by quite a bit last week. Meat companies report difficulties in selling adequate volumes to the supermarkets and the Veganuary campaign for this month may also be a cause.
What we expect: This week will be quiet in Asia, while in Europe we will move closer to decisions about how tanners will respond to higher abattoir prices for male hides. We face difficult times again, and they could have been avoided. We still tend to believe that the lower kill will become an argument for chilled hide supplies, but we still don’t expect any significant change.
| 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 | € 0,70 | Stable |
|
|
Dairy cows |
15/24,5 kg |
22,5/23,5 kg |
13/22 kg |
20/21 kg |
€ 0,70 |
Stable |
|
25/29,5 kg |
27,5/28,5 kg |
22/27 kg |
25/26 kg |
€ 0,60 |
Stable | |
|
30/+kg |
33,5/35,5 kg |
27/+kg |
29/31 kg |
€ 0,55 |
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 |
Stable |
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