This week: The period after the holidays until the end of September has been characterised almost always by little movement and activity; we feel it will be the same this year. In 2022, this is perhaps even more pronounced because companies simply have too little basis for decision-making and, in addition, the risks and problems have to be carefully analysed and evaluated.

In Europe at least, there were hopes that during the holidays things would change for the better. This has not happened in western Europe and one has the impression that this also applies to China. In addition to political instability, there is China’s handling of the pandemic. In Europe, uncertainty about energy prices and inflation remain so dominant that the necessary confidence in developments for the coming months is simply not emerging. This inevitably means that decisions will be delayed again.

This also applies to the hide market. Of course, production has to be supplied and filled and this certainly happens within the framework of what is absolutely necessary. This reduces business in Europe to the minimum.

Only occasional random business was added last week, which can hardly be described as representative of the market situation. Perceptions and market opinions have diverged widely in the last few weeks. On the one hand, there were those who saw the low kill of these last few months as a reference and basis for decisions on price development.

On the other hand, there were those who were more concerned with the much worse outlook for the overall economic situation. This led to very widely diverging price expectations and equally diverging sales strategies. However, this week we got the impression that concerns about the coming weeks and months have increased overall. The outlook, especially in the furniture sector and to some extent also for the coming shoe season, has become noticeably gloomier. Sentiment in the automotive and luxury goods sectors is still much better, but between the lines there is more concern in these sectors as well.

Sales this week were again mostly confined to the renewal of regular programmes in Europe. This is still almost sufficient, given low slaughter numbers. At least for us, interest from Asia was very quiet this week. Towards the end of the week, there were more and more reports of sales from various origins, some of which were significantly below the last reported prices. This was mainly true for cow hides and for names that were said in the last weeks to have accumulated some stocks over the summer and perhaps because of the longer storage period decided to sell these goods to Asia now rather than wait for better times in Europe or elsewhere. The price range in the market right now is wider than ever.

The kill: This week you could already see an increase in production in the meat industry. Slaughter numbers everywhere in Germany are now noticeably higher and if there were not continued labour problems, we would assume that the numbers would be even higher. All forecasts now point to further increases in the course of the autumn, although the really significant rise will probably only occur with colder weather. Overall, however, we must expect significantly higher volumes for the rest of the year.

What we expect: We can see no reason why we should see more activity in the coming weeks. Circumstances have not changed fundamentally and we cannot see a sustained improvement in leather demand. This inevitably means that supply will probably become more important in the coming weeks and months. The further development of the market will thus depend on whether the increasing supply of hides can be absorbed into the market to meet demand for leather. We are still on the sceptical side; it would therefore be desirable if the increase in the kill were to take a little longer. A precise overview of leather demand will probably not be available until mid-October, so it would be better if there were no great pressure from supply until then.

Share this story: