German Perspective - 28.07.20
28/07/2020
With little clear information offered from the individual tanners it remains a guess what the real situation is. With some it is obvious that their order situation is not as bad as it has become common practice to publish. Others may just operate on the (justified) hope for an intensifying re-bound of demand and manufacturing in the last quarter of 2020 and further improvement in 2021. For still others, the situation is really bad and the covid-19 disruptions are just the final lap. So, everyone can pick what suits or where one believes they belong.
Slowly the industry is starting to realise that it can’t just wait for a covid-19 solution. It won’t simply disappear nor will a vaccination reach everyone within an acceptable time for manufacturing and retail. Decisions will have to be taken before then and life has to be organised in the meantime.
For the leather industry a lot, but not all, is bad. Formal shoes and general fashion might suffer because there will be fewer events and occasions to show what one has, there remains other options and directions where leather can be used. If individual transport is favoured over public transport, the story of the passenger car could enter a new era. Despite massive traffic jams people feel safer in their own car than in crowded busses and trains (see China now). Also, if you don't go out so much anymore, your sofa is taking on new value in terms of comfort and sustain-ability. In some parts of the world, outdoor activities such as trekking, hiking or just simple walking close to your home might also see a rise in popularity; this is an opportunity for shoes and boots that offer comfort and last.
Like always, there is more than just one option. Either you complain about the risk or you look for the chances. Doing nothing, which is sometimes an adequate third option, seems not to be one for this situation now.
With the holidays here being now a welcomed excuse, tanners in China are somewhat more active and one gets the impression that the upholstery tanning clusters in the North are either receive fresh orders for the winter or they expect them. Activity from the upholstery tanners in China has increased for weeks now and this is also reported from other origins.
They remain extremely price sensitive and the steep fall of the US dollar is not making it any easier for us. However, the number of bids through various channels was not bad this week. Some weeks ago all could be taken, but with the present exchange rate several had to be countered, which was then refused by the buyers. Regardless, an acceptable number of sales for cows was achieved and it is interesting that one thing has changed: while weeks ago the interest was for quality grades, the focus is now back to commodity and price.
In Europe activity was once again very slow. Tanners still don't see the present price levels as an opportunity and continue to believe that, generally, inventory is a higher risk than low valued purchases for the foreseeable future. At the end, the market remains stable with very narrow price ranges we have been seeing for a long time.
The Kill: The kill drops, which is not surprising. Also the southern part of the country is now preparing for the holidays and supermarkets run their stocks lower. The coming three to four weeks will see the bottom of the year.
What do we expect: The market had been stable for a long time and also EUR/USD traded in a narrow band. Now the currency becomes a factor and should limit any major optimism for the price trends. With just the overseas market open, the currency should put new pressure on the euro market.
| 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 | € 1,00 |
Steady |
| 25/29,5 kg | 27,5/28,5 kg | 22/27 kg | 25/26 kg | € 0,55 | Steady | |
|
Dairy cows |
15/24,5 kg |
22,5/23,5 kg |
13/22 kg |
20/21 kg |
€ 0.50 |
Pressure |
|
25/29,5 kg |
27,5/28,5 kg |
22/27 kg |
25/26 kg |
€ 0.45 |
Pressure | |
|
30/+kg |
33,5/35,5 kg |
27/+kg |
29/31 kg |
€ 0.40 |
Pressure | |
| Bulls | 25/29,5 kg | 27,5/28,5 kg | 22/ 27 kg | 25/26 kg | € 0,65 | Pressure |
| 30/39,5 kg | 36,0/37,0 kg | 24/34 kg | 31/33 kg | € 0,70 | Steady | |
| 40/+ kg | 45,0/48,0 kg | 34/+kg | 38/40 kg | € 0,60 | Steady | |
| Thirds | 15/+kg | 25,0/27,5 kg | 13/+kg | 24/26 kg | € 0.25 | Steady |
| Thirds bulls | 30/+kg | 38,0/40,0 kg | 24/+kg | 33/36 kg | € 0.35 | Steady |
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