US Perspective—10.11.20
Courtesy of The Maxfield Report
www.themaxfieldreport.com
Trading levels last week were no worse than steady. The consensus of the trade is that sellers encountered a considerable amount of resistance to their efforts to obtain higher trading levels, and that efforts from buyers to buy at lower prices were quickly dismissed by packers.
There are unconfirmed rumours that some wet blue producers are willing to trade at levels that would make buying their product cheaper than buying, transporting and processing wet-salted hides. According to reliable sources, wet blue producers continue to press for high-volume business and those willing to consider volume for prompt shipment are able to negotiate prices.
Elsewhere, reports from the automotive segment claim tanners have seen a slow improvement in business over the past several months and that business is definitely better than in the first half of this year. That said, with news of lockdown in Europe and the US facing a potential lockdown of its own, coupled with hide prices that have doubled from their lows of the year, many tanners are moving forward only very cautiously.
Reports from the Chinese furniture segment continue to claim most tanners remain busy. This does not mean all tanners are profitable, especially given the rapid increase in hide prices in the past few months. Strong demand for hides from furniture tanners is the reason we have seen many lower-grade selections more-than double from their lows of the year and many of these lower-grade selections are now higher than levels of a year ago.
The good news for tanners is that many have seen some appreciable increase in leather prices in the last week or ten days, affording tanners some “breathing room”.
Cowhide prices were steady for the most part, with isolated opportunities to sell at slightly higher levels. The consensus of the trade is that it is highly unlikely that producers sold their week’s production.
