What happened this week: The first week of October has ended. Winter is coming and people have to check they have what they need for cold and rainy weather. This usually triggers an uptick in consumption of shoes and apparel. Also the upholstery industry favours this time of the year when the people change from outside activities to more stay-at-home attitudes. With the pandemic, nobody knows really how consumers are going to react in 2020. Upholstery leather seems to be taking advantage already, but what it means to the shoe sector is still totally unclear. The same applies to leather accessories.

China has celebrated its second-most important holidays of the year, the Mid-Autumn Festival. Reports talk about almost totally normal attitudes as far as domestic travel and holiday activities were concerned. Restaurants, holiday resorts, airports and train and bus stations were reported to be as crowded as ever. This is actually what we are experiencing in the hide market as well.

Anyone who works with raw material grades that can be used in China will agree that the demand has been strong from that part of the world. Upholstery tanners in Europe also became pretty active in September, but on the whole, it was China, once again, that rescued the consumption of hides and skins, just as it did in 2008 and 2009.

The surging rise in cases of covid-19 in Europe have made the future very uncertain once again. Lock-downs and supply chain disruptions have to be expected again any day now. Governments will do anything to prevent shutting down their economies again, but who knows what they will decide if the hospitals start filling up again.

It is essential now for business that China continue its progress; the Chinese are spending at home the money they have spent during visits abroad in recent years. Raw material suppliers can benefit from steady and stable sales and shipments to the Far East.

Business last week was totally focused on Europe. China only emerged from the Mid-Autumn Festival at the end of the week and all customers wanted to do was check the situation to see if sellers would be willing to discuss price concessions. Real activity will only return this week.

We have been involved in many discussions, because the tanning industry began to notice that the slaughter industry was looking for serious price rises this month. The gap is wide and opinions still far apart. Consequently not much business could be concluded and the majority of the discussions postponed. It is difficult with all the uncertainties to find a common base. It is also difficult to understand why meat companies are taking a chance when the kill is reaching its peak.

The kill: Temperatures are falling and the rain too. We see slaughter numbers rising and believe that we are now entering the typical seasonal cycle that will run until Christmas.

What do we expect: We hope, that the slaughter industry is going to realise its risky and dangerous gamble. Hides can be moved and customers found, but we should not give up market share to others by pushing asking prices too high. Next week will know more.

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