This week: Many in Europe took the opportunity to finally meet in person again. The fair in Milan was the first opportunity in a long time to meet colleagues and clients in one place. As is so often the case, these events are needed so that some can see for themselves the facts and the real situation within the industry.

It was very pleasing to note that despite the pandemic and the difficulties, many took the opportunity to come to Milan. With reduced space, many exhibitors and visitors from overseas were missing, but still everything was somehow like it always had been. The exhibitors were committed and still convinced about the value of their products. Suppliers went in search of information and leather buyers went in search of new articles and trends.

The fair remains a place for what leather really is, a fashionable, elegant and sustainable product, which remains the preferred material in many areas. However, this has nothing to do with global mass production and the problems leather faces in industrial processing. Mass producers find it gratifying to be pulled along by the mainstream and then use arguments about climate change to elegantly distance themselves from the processing problems of leather without losing the customer.

This also confirmed at Lineapelle that there is no need to worry about leather in particular, but that mass production has started a trend that will be very difficult, if not impossible, to stop in the coming years. The significance of this development must be assessed and evaluated by everyone for their own situation.

In any case, Lineapelle continues to be a small enclave of recovery in which the benefits and sustainability of leather continue to be demonstrated actively and with great enthusiasm. However, this did not help to mask the fundamental problems of the market. It quickly became clear that raw material prices are now also entering the correction seen in other regions outside Europe. In particular, the difficulties in automotive leather production are the decisive triggers here. In discussions at the fair, there was a hard struggle to find a viable price basis and the interests are manifold, because the leather industry is also hardly interested in a very sharp and rapid price decline. Nevertheless, prices for cattle hides also have to be adjusted to the changed market conditions.

Depending on the type, the cards were quickly on the table and discounts of between 5% and 15% were the subject of discussion. Those who were prepared to accept a serious compromise could certainly come to an agreement with their regular customers; those who were not prepared to accept it as sellers would have to wait and see whether the situation and demand would improve for them in the coming week.

The kill: The kill was still rather unstable this week. The weather in our region is now slowly starting to turn autumnal and the summer temperatures are coming to an end. Demand for meat will only improve as the weather deteriorates and farmers become willing to sell more cattle.

What we expect: The now long overdue correction in prices has begun. This coming week we will be able to assess the full extent of it. From all the information that can be gathered at the moment, it can be assumed that this is only the first step of what will continue in the coming weeks until a sustainable basis for prices is found again. For Europe, this means that a balance must be found between the increased kill and the simultaneous seasonal increase in leather production that are normal in the final quarter of the year.

Share this story: