This week: The long Easter break is behind us and two shortened weeks have come and gone. For some people it was a very welcome break after the extremely busy and exciting weeks that led up to it. The coordinated purchasing activity from China is took a break for the almost the third consecutive week last week. It seems several big players have decided to dig their heels in and to pause purchasing and that most of the Chinese tanners have followed the same policy.

We are fully aware that not many people share our opinion, but we think that, with the rise of social media and WeChat groups, the information exchange has become increasingly important for business. Not being a member of the right groups can make timing difficult, but the behaviour of agents and the activity in the early days of the week offer a very clear indication of what to expect in the short term. The question remains if there is anyone orchestrating tanners all around China. Is it really reasonable to think this would be possible in a country the size of China with its numerous tanning clusters? Could anyone really build such discipline and maintain it?

In the western world this would be a very unlikely scenario but in Asian societies it is not completely out of the question. Whatever the truth, one has to be impressed by the discipline with which buyers have been acting since the market collapse of last summer. If it was a strategy, it was a very smart one. The Asian tanning industry had the great advantage of the pandemic coming under control much more quickly there, which meant confidence and business stability returned sooner than anywhere else. Europe is still struggling with this today with on-and-off of lockdowns in many countries and still no clear exit strategy. The only hope is the vaccination programme and even that is not offering clear indication of when normality can return.

Some industries continue to suffer, but the pandemic has been beneficial to others. Recently, a German magazine published a report that mentioned supply shortages for the furniture industry, and even leather was mentioned. Well, this just confirms what we knew already. People have been staying at home, with many spending the money they saved by not going on holiday on upgrades to their houses.

There was not much business done last week. Asian clients were almost completely absent and European business is paralysed until the next abattoir prices for April are finally fixed. Meat companies continue to show great ambition while, in Europe, tanners are beginning to think that enough is enough and are discussing how they can defend themselves against quick and steep price rises for raw material.

This situation left the number of trades at a very low level despite the fact that everybody knows that in whatever way the raw material programmes for European tanners will need to be renewed in the next week or ten days. The way towards a resolution seems hard, with positions about what constitutes fair pricing very well spread.

The kill: We have had two shortened weeks and this means the numbers have been cut in keeping with the reduced production days. In our part of the country at least there is nothing abnormal in the numbers for this time of the year.

What we expect: We refrain from any predictions. Meat companies expect more money for their hides and for some grades they may still be in the driver’s seat. For hides that have to perform globally one has to assume that this could become difficult. The dynamic is gone and the US dollar is down. It smells like a change is coming now.

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