This week: Current orders in the leather industry and the resulting demand for raw hides cannot be explained in terms of quantity. The facts speak for themselves: the continuing uncertainties about international transport for the next few months mean that security and supply are paramount.

Overseas tanners, in particular, have to plan and secure their raw material supplies, even without firm leather orders. 
Only small volumes of European hides have been sold to Asia in recent months. Most European hides found buyers in Europe. For the suppliers, especially abattoirs, this was a comfortable situation. However, if you think about the future, you have to ask yourself whether the current raw material prices, in combination with increased production and energy costs, can be passed on in leather prices for the next season. We have already asked this question many times and it remains the case that we will only really know after the summer.

Even if some don’t like to hear it, logistics will play a decisive role. It will be difficult for consumer goods brands to deliver large volumes of Asian-produced goods in time for the Christmas season. There is no doubt that the shoe industry is restocking leather at the moment. Restocking, however, is not the same as selling shoes and at this stage there is no indication that consumers will buy significantly more than in 2019, the reference for comparison.

This week’s sales went along already familiar lines. European customers are sticking to their regular purchases and thus the majority of contracts for July have already been renewed. The general situation also means that, despite the almost complete closure of the leather industry in the first three weeks of August, ways are often found to take delivery and secure the goods anyway.

There were only marginal changes in prices, which mostly meant minimal upward corrections. The first sales to Asia for a while were made, although these were almost exclusively sub-varieties at very favourable prices. The total number of sales was sufficient and all the standard items can still be cleared without too much struggle. There are also odd bits and pieces, but these have been hard to clear over the past months. These days, buyers don’t experiment any more.

The kill: Slaughter continues to settle around normal volumes for the season. The livestock population in Germany continues to reduce, suggesting a moderate decline in slaughter in the coming period. With more people spending their holidays at home, production is expected to remain stable in the coming weeks.

What do we expect: In our view, the price situation will not change very much in the coming weeks. However, this will only be if the slaughter industry does not dare to experiment. Summer is not a particularly attractive period for this, which does not necessarily prevent everyone from experimenting. Three more weeks and the European industry will be, almost, closed for the holidays.

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