US Perspective – 08.09.20
Courtesy of The Maxfield Report
www.themaxfieldreport.com
Interest was mixed last week. We heard that some potential buyers started their ideas at prices $2-$3 under asking prices, only to find packers quickly countering at full asking prices. Meanwhile, potential buyers submitting unsolicited bids found packers not inclined to extend their sold-forward positions, regardless of the prices being bid.
Reports from the wet blue trade claim offers lists were not nearly as populated this week compared to the past few weeks; however, popular opinion of many pundits is that there are still a decent number of unsold hides held by producers.
Prices are likely up off the bottom of the market; however, pundits are quick to add that increases appear as if they are minimal at best, and not as appreciable as the increases seen in the past few weeks on wet-salted hides.
Buyers appear as if they stepped up and begrudgingly paid the asking prices of packers.
Reports from China claim interest this week from tanners appeared mixed.
A few large tanners are on record claiming they are pleased with the recent rise in hide prices, especially keeping in mind they had already purchased substantial quantities of hides at prices well below current trading levels. In addition, these tanners admit that leather business is improved compared to six months ago.
Most upholstery tanners appear as if they are enjoying a substantial improvement in business. This improvement in business has resulted in decent interest in lower-grade hides allowing producers around the globe to “clean-up” their unsold inventories. Lower interest rates and the inability to travel because of covid-19 have made many consumers willing to spend money on good-quality leather furniture.
But with many people working from home in the past six months because of covid, the demand for quality dress shoes is dwindling and being replaced by an increase in demand for casual shoes, which often do not have leather as their base material. Leather demand is improving, but it is still 30%-40% lower than levels of a year ago.
It appears as if business for most automotive tanners continues to improve. Sources share that, overall, business is approaching 90% of pre-covid levels, while in addition, we understand a number of Asian automotive tanners appear as if they have leather orders that require better-quality leather, which has these tanners targeting US steer selections such as BBS or HNS.
Most split tanners continue to complain about a lack of orders.
