This week: Many fundamental problems are either being ignored or deliberately pushed aside at the moment. This week was further proof that there are two ways to deal with the situation. Either you enjoy the sales you have and the customers who continue to accompany you on a regular basis, or you deal more with what is currently not sellable along the supply chains in the leather industry and will, sooner or later, burden the entire chain and industry.

Demand is concentrated on fewer and fewer regular customers, specific leathers and, moreover, the possibilities of selling are becoming more and more limited. There is simply a lack of demand from the leather industry and this should not be obscured by individual deals and sales. These are always sporadic deals, often smaller, speculative purchases that are not based on real demand. If this is enough for you, you may be satisfied, but for us this cannot be the basis of development in the leather industry for the near future.

Rumours of large stocks keep coming up and these are now heard from almost all regions of the world. The continuously weakening US dollar is also a further burden on the revenues of hides from Europe. The US dollar has now lost almost 15% from its highs in 2022 without a corresponding correction in prices in Europe taking place. It will be difficult to sell all the resulting raw material from Europe, especially over the summer months and the holidays, which are now fast approaching.

Every week and this week, too, business is not zero. Individual sales are possible in Europe, while the prices offered from Asia, especially for cowhides, are not really acceptable at the moment. Tanners, at least in China, have no need at all to adjust their asking prices at the moment. Even less so when there are other markets in Europe that have already made the price adjustments.

The kill: The kill was significantly reduced this week owing to the public holidays for Easter. Live cattle prices continue to fall, but it is simply not the time to assume that this could boost demand for beef. Temperatures are still relatively low and cattle are not yet going back to pasture. Once the grass really starts growing again and the ground dries out, there may be more interest from farmers to put cattle out, but we are now entering a phase of lower production and lower weights.

What we expect: We believe that we are approaching a crucial crossover into our market here. Except for selected hides, our hides are becoming less and less competitive. And this in a market that does not need all the production at the moment for leather orders. What sells is what is needed to cover current orders. As long as there is no major need to adjust prices, the price trend will continue to be very tough. Finding a reasonable balance of prices between the hides for which there is still a market and those that don’t really have a market is becoming more difficult from week to week.

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