This week: We would like to wish all our friends and business partners a happy, healthy, peaceful and successful New Year. Probably these wishes are even more important this year than ever before.

The first week of the New Year was even less eventful than we expected. In Europe, some customers were back and production started to run again, but it seemed that they were busy with other things, not with raw material purchasing activities.

The Asians, of course, especially China, were hardly active in the market either, apart from exchanging good wishes. Current production is covered with raw materials for the next few weeks and we don’t really know anyone at the moment who would consider it necessary to spend time on procurement of raw materials. It may be right or it may be wrong, but nobody expects a problem in the supply of raw materials in the coming weeks, even though the kill in our part of the world is extremely low at the beginning of the year.

Here and there, some flexibility was necessary for planned deliveries for the first week could be completed on time. However, this type of thing does not make anyone nervous. The large oversupply of raw material from many parts of the world is making a much deeper impression on buyers at the moment than the possible bottlenecks that might occur in the next few weeks owing to the low slaughter levels in Europe.

Of course, the long phase of disproportionately low production in China is having a particularly strong impact now. For a long time, most tanneries have been running at significantly reduced capacity and this is especially true for the factories producing furniture leather. Due to the time of year alone, a short-term recovery is not to be expected in the next few months. Even though many people should have been aware of this months ago, there are still people who are surprised by the fact that there is a very long holiday break in China for the Lunar New Year (January 25 this year).

In our experience, producers in China have always found a way to keep their factories running when the order situation required it. There will probably be a recovery in leather demand at some point, but for the coming weeks and perhaps even for the whole first quarter of 2023, with the usual exceptions in isolated sectors, it really does not look like it for mass production. 

We also had very little activity in sales this week. There are always the occasional lucky deals, but in general, interest was very low this week, both in quantity and price. Once again, no sales and therefore no movement in prices either.

The kill: As expected, the kill was very low and the start of beef production into the new year was slow. Volumes should continue to recover slowly over the next few weeks before we enter a decline again for the carnival period.

What we expect: While we can expect to see more activity over the next few weeks, it remains relatively unlikely that this can in any way be seen as a quick return to normality. If it becomes clear that demand will slowly picking up again and China is working its way out of the pandemic phase in terms of consumption, we might expect a general revival. In this respect, business will probably have little of note to deliver in the coming weeks and negotiations in all directions will probably remain difficult.

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