This week: Price, as we know, is one side of the coin and demand for material is the other. In Central Europe, this is the problem at the moment for certain hide types. Here we are essentially talking about heavy male hides for the automotive industry; there is currently not enough demand for the entire supply. There are various reasons for this, which have already been sufficiently discussed.
This would no be so remarkable if it were not increasingly apparent that many slaughterhouses and suppliers did not see this situation coming. This remains remarkable in view of the information that has been available for months.
In the course of last week it was confirmed more and more that there are many producers who are desperately trying to sell their production fresh and chilled. This is difficult because it gives the impression that most tanners have already more than adequately covered their needs for the next few weeks. So, what often happens is that all sorts of prices are passed around without triggering any change in the balance between supply and demand. The real problem, however, lies in two areas. First, there will be little change in the oversupply over the next few weeks simply because of the higher kill figures. What can be done with the material? There are not many options.
You could salt the product and store it until the situation eases. Secondly, you could tan the hides and wait, or look for new customers for them. Thirdly, you could lower prices so much that the goods become attractive again in other markets. This last option seems unlikely to win support. It is also not particularly inviting, for two reasons. Many producers would have to accept considerable losses in revenue and, secondly, there is the question of what would happen in future if this raw material is needed at some point in 2022.
These are certainly decisions that are being intensively discussed today, both in the slaughter industry and in the leather industry. The problem, which we have often pointed out in the past, is above all that the prices for this product moved too far away from the market realities in the second quarter, making any correction now all the more painful. For the other hide types, especially cows, there is also noticeable market pressure, but it is much less because prices for these hides have not risen as much and demand has not collapsed as much due to the more stable furniture leather business.
Sales last week were rather sporadic. Quite a number of emails arrived from people in Asia asking for offers, but in the end the bid prices were too far away to be acceptable. The main interest was in low grades and other items that were, at least on the surface, inexpensive. The overall volume of sales this week was well below average. The focus is now on the price negotiations with the slaughterhouses; this will decide to what extent our goods will be competitive in the next few weeks.

The kill: Slaughter continued to rise last week. Owing to the high cattle prices and the difficult calculation in the slaughterhouses, as well as the lack of manpower, production was not at the level one might have expected. Hide weights for females are increasing, while for males they are stagnant and certainly a little below average for this time of year. 

What do we expect: The market continues to be in a discovery phase at the moment. Demand worldwide is not really enough at the moment to absorb all the hides being produced. This situation will certainly continue for a while and sales will, therefore, depend on the competitiveness of prices compared to other origins.

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