What happened this week: After many weeks of headlines detailing the latest numbers of covid-19 cases, infections and fatalities, with numbers presented like a live ticker-feed from the stock markets or football matches, the limelight is now slowly shifting.

In many countries the rise of infections has slowed or even been reversed and governments are easing lockdown measures. The world is now beginning to deal with the consequences. Governments have agreed to financial aid, trying to stem the collapse of their economies, but looking at the data one has to believe that they have not been too successful so far. Unemployment has exploded, many companies are depending on government aid only and in many countries people speak about the biggest collapse in history. As bad as this is, just as frightening is the fact that there is still no end in sight.

Companies are desperately trying to restore production, but in the and it all depends on the consumer. Travel, entertainment, tourism and dining out, and many related industries, are almost paralysed, despite many countries trying to find ways to reopen for tourists. If people lose some of their fears about covid-19 and if we experience no second wave, it would help airlines and hotels.

Unemployment curtails also spending power and it still has to be seen if the people will quickly return to easy spending again. In China, at least, consumption is already improving again and the government is supporting shopping with many support incentives. China is the front-runner in the covid-19 cycle and so we should hope that the trend spills over into the rest of the world, even if that still takes time.

In the hide business one can easily sense that the decisions are driven by personal opinions, which we might also describe as speculation. Some expect a quick recovery, others see a long road ahead. Some have financial resources at their disposal and don’t want to miss out on cheap hides, but others feel a cash squeeze already. Some are just fishing, while others wait for better deals. However, one thing is clear. Very few are purchasing because of a desperate need for raw material.

This was reflected this week once again by a big number of enquiries for all kinds of items. The sources of these enquiries and the way they were presented made it clear that they were not part of any clear strategy, but just an attempt to get some cheap deals, perhaps even for items these customers normally cannot afford.

The bottom line was long and tiring e-mail exchanges or offers that did not even receive a reply. This left us with only one client of quality and eventually realistic proposals that have been accepted. Rising shipping charges and other rising costs are making all these sales less profitable. In Europe sales were limited to several trials. At least some tanners are taking advantage of low prices to test raw materials they usually don’t consider. We understand that some of our colleges lost a bit of confidence in their belief that the market would quickly recover and might think that they have more hides coming in than they have potential to sell.

The kill: In Germany, as elsewhere, some larger slaughterhouses have suffered a great number of covid-19 cases and have suspended operations or have been closed. We see slaughter levels still at 20% below normal. There are talks of an EU intervention in the beef market, which could support slaughter numbers, if it comes to pass.

What we expect: We see demand further stabilising for quality hides. At a certain price, tanners with cash will be willing to buy good-quality hides, even without leather orders. Lime splits are in short supply again too. However, asking prices above tanners’ ideas will still not be successful.

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