What happened this week: Most people are enjoying the return of the summer in our region. Blue skies, sunshine and high temperatures fill the swimming pools, beaches and lake-sides and are making social distancing difficult. A first wave of holidaymakers has returned and, in combination with the general easing of restrictions, the daily rate of Corona infections has begun to rise again and offer a foretaste of what can be expected if the trend continues. Anyway, it is obvious that a second full lockdown is not an option and so one can only hope for discipline and further progress of science to find a vaccine or a cure.

Under these circumstance one had to be pleased by the continuing interest in hides. Before now the usual suspects had begun to celebrate and declare the crisis to be over. It might be wise to sit back for a moment and to check the facts.
Companies have been studying their options for the future. If they have not come to the conclusion that they would be better off closing their business as soon as possible, they are going to have to make some plans and take some decisions for the future. This implies also to raw material and procurement. In this regard, the automotive and upholstery sectors have already made progress. No matter how many complaints you can still hear, the facts are clear. Vehicle production continues to normalise and delivery times are sometimes really strange. It’s not unusual for it to be 12-16 months for some models. Of course not all these models are using leather interiors.

Furniture upholstery is also performing well. In Europe this may not be so obvious pwing to the holiday season, but in China the trend is clear and strong. For domestic and export sales manufacturers are taking decisions and they are positive. They are looking for raw material to buy, but that sounds easier than it really is. Spoiled by the market trends of the past six months, they still believe every deal has to be a bargain. Wrong. Sellers must be glad of any sale. Wrong again. There is an endless supply to choose from of hides of all different categories. Also wrong.

The US dollar is very weak and the price of four weeks ago has to be $1 or $2 higher to achieve the same return in euro today.

The volume of interest last week was once again good. The interest was also very widespread with the only exception being medium-weight male hides. Mainly high-quality females and low grades topped the list. Prices in euro were steady and in US dollars, $1 higher.

The kill: The kill is still stable at the lower, typical summer levels. Beef business seems to be improving a little, but until mid-August we will remain in holiday mode. Weights continue to please. 

What we expect: We think that our shift to a more positive note has been confirmed last week. This is not a trend yet, but it is at least a change from the one-way road we saw for many months. Business will remain focused and the general recovery of leather demand is still missing. However, it could be the start of a change. 

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