This week: Another week has come to an end and the first half of 2022 is slowly drawing to a close. Who would have guessed at the beginning of January what was to come in the following six months? Probably two things can be said for the moment. First, no one could have expected a new war in Europe and, consequently, the realisation that politics and economics are no longer really capable of managing crises or are prepared for them.

Certainly, the leather market is affected by all these events, but for some years now, leather has no longer been a necessary basic material demand for which is accompanied by the usual fluctuations in the consumer goods markets. The resulting effects have not yet really been internalised by all those involved. Thus, the usual stories continue to be told, always in the same hope that it will influence the market for the next few weeks and support the respective interests in buying and selling accordingly.

The leather industry in the northern hemisphere  is more and more preoccupied with its summer holidays. The whole environment is not encouraging many tanners at the moment to come up with solutions for the hides produced in late July and August. People are obviously very content to take a break from the market for a few weeks and, if necessary, use the opportunity to reduce stocks.

Normally, one would perhaps expect that the falling raw material prices would represent a good opportunity to stock up for the second half of the year, but there has been little evidence of this happening, at least until now. Only in Asia can one see this kind of routine.

There were some interest and enquiries last week, but the bid prices simply do not fit into our currently price-grid. There are sellers in other European countries who are able and willing to sell at much lower prices than ours, and this, of course, is used as a reference for what they would be willing to pay for our material.

Even if one does not like to talk about it openly, one notices that the leather industry obviously has to plan its cash-flow much more carefully again in view of the reduced summer revenues and the strongly increased costs. Even if there are no serious problems yet, payments are not coming in at the same speed as they did in the last few years.

Business and sales this week were below average. While we in Europe are currently waiting for the new deals for the coming month, the prices received from the overseas markets were simply not workable. These were not small differences either, but 20% or more was not uncommon. This meant that sales remained very sporadic and limited to individual deals.

The kill: There is not much news to report on the kill. It is just plodding along. The cold stores are well filled and demand for prime cuts is simply too low. Live cattle prices continue to fall and it is hoped that the price relief will eventually revive demand for the holiday season and the restaurant business.

What we expect: We are now in the next round of buying and pricing at the abattoirs. The outcome will most certainly affect business for longer than just the usual next few weeks. Without a serious adjustment to the world market and the possibility of squeezing out other suppliers on price, sales opportunities will probably remain limited. The only hope for a real revival of demand is in Asia, provided that prices there are considered attractive for the second half of the year.

Share this story: