This week: We saw enquiries from China and the Middle East last week, which had been almost completely absent in previous weeks, or could only be observed sporadically. However, it must be noted that there were no overwhelming movement, in terms of quantity or in terms of price, but something is better than nothing.

The bids that were received were initially far too low and it then took up to three days to work their way very doggedly and gradually up to discussion-worthy levels. Nevertheless, prices still remained below the asking prices; there was still a shortfall of $1-$2 to be happy. In the end, the only decision left was whether to maintain deliveries over the summer or wait for a better autumn.

In Europe, the situation is now relatively clear. Many tanners are either already covered until the summer holiday, or the required quantities have already been defined and, as a rule, these are then covered with the regular suppliers. Quantities that cannot be placed in July will probably not find a buyer in Europe until September.

The problem, however, is in August. Against all reason, the holiday period of the European tanners is increasingly concentrated in the phase from week 30-34, so that deliveries, especially of fresh hides, drop sharply in this period and thus represent an extreme burden for the slaughterhouses and processors. The capacities for salting are not sufficient, also because, of course, holiday periods and school holidays also put a strain on and reduce capacities at this stage.

Every year we discuss this issue with the leather industry, but every year it gets worse. This year, of course, tanners have to deal with other difficulties. Rising costs, high uncertainty regarding orders after the summer and increased semi-finished stocks. In Italy there is also an extreme water shortage, which could possibly limit production over the summer. Under these conditions, many suppliers are deciding less according to the market than according to stocks, which is why the price information is also very divergent.

The ‘spot market’ certainly offers favourable opportunities, while the long-term, regular supply chains tend to be ‘softer’ in their movements. This situation brings a lot of unrest into the discussions, because it naturally leads to great uncertainty. Meanwhile, more hides are finding their way directly into collagen production.

Sales in Asia last week were mostly concentrated on better qualities. Something that can be seen everywhere overall. The orders for the mass markets and the volume business in the middle and lower price ranges are either not coming or are obviously very uncertain. This is of course understandable, because middle and low incomes are being hit hard by the price increases, and products made of leather are no longer among the necessities of life.

In Europe, the problem of energy supply and prices for private households and for companies is also likely to play a major role here. At the moment there is no certainty at all in the calculations, and the only costs where we think one can achieve something at the moment are those of raw hides. All in all, a better week on average in terms of sales volumes without it being evenly distributed and with the feeling that people are really buying against a real need for leather and orders.

The kill: No changes in the kill. Very hot weather in many regions, labour shortages, high price consciousness due to general rising food and energy prices continue to weigh on beef consumption. The holiday season is now upon us and this will not be positive for slaughter either.

What we expect: Even if this week provides a slightly more positive picture overall, we do not believe that the fundamental problems have been solved. In the end, it remains the case that demand for leather needs to pick up significantly, especially considering that the kill in Germany has been far below average in recent months. At the moment, the impression remains that people are mostly buying for production, or they don’t want to ‘miss out’ on cheaper prices and are just buying a little extra. For the next few weeks we will need further support from Asia if the situation is really to stabilise and the trend is to reverse.

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