US Perspective—03.03.20
Courtesy of The Maxfield Report
www.themaxfieldreport.com
Packers entered last week in possession of offer lists that had a full complement of selections offered, with most available for prompt shipment. Many of the packers had more loads for sale than they were willing to admit. Most of the packers lowered prices by roughly a couple of dollars across the board.
With many tanners in China still closed, the number of bids was not plentiful, leading to thoughts that we were likely in store for another lacklustre week of trading. However, we understand that towards the end of last week many of the packers began booking as many bids as they could. It appears packers begrudgingly resigned themselves to the fact they had little if any choice but to get some business on the books for immediate shipment and it is widely believed sales concluded were at levels well below the prices reported on our price guide.
Early reports from Asia confirm “rumblings” that a number of producers were attempting to “cut their losses” and booking the majority, if not all of the bids they had late last week, regardless of the price. Sources share that the majority of these sales are voluminous in nature and are for prompt or immediate shipment. It is widely speculated that these sales will put pressure on previous contracts that remain outstanding and affect the ideas of customers as to their price ideas on future business.
Tanners, if coronavirus is not affecting them, appear as if they are enjoying decent business. In the meantime, with the passing of every day, there is more and more concern about the market in South Korea and Italy.
Overall, the market remains a huge challenge for every producer with a weekly production of hides. The good news is that there are reports of more tanners and shoe factories coming back to work this week and the prevailing hope of producers is that this will go a long way towards creating more demand for hides, as well as helping to ease the congestion problems with containers and steamship lines.
Also in the cowhide trade, sources report offer lists of producers were more populated last week. Most producers appeared as if they had a full complement of selections and more loads for sale than they were willing to admit. We understand the majority of producers lowered their asking prices by $1 to $2. By the end of the week, it appeared that a number of producers were much more aggressive for sales and agreed to write business at levels well below some of the levels reported on our price guide.
The market remains under pressure and until we are able to see some relief in the logistical problems created by the coronavirus, we are of the opinion the market will likely continue to drift lower. However, the good news is that once we can get past these problems, there is a very good chance of a rebound in prices.
