This week: The holiday season is coming to an end. This does not mean great activity on the hide market, but rather people returning to their desks mostly to address administrative issues. Some people are also starting to think about whether they have everything ready for the trip to Shanghai at the end of August for the All China Leather Exhibition; it looks like many more people have decided to make the journey than earlier indications suggested.

As is so often the case, many people still expect more from these fairs than they can actually deliver in the end. For most, however, it is now more than three years since they were last in this important market. Curiosity drives a desire to travel but there is still not much expectation that much will change in terms of general demand.

After the holiday period, one is forced to deal with reality again; the issues are no longer in the distant future. Whether you are an optimist or a pessimist, the number of possible difficulties that await us in the next month increases almost daily. It is not only the eternally recurring question of what will happen to leather as a material, but it is also, of course, the many changes that are affecting consumers worldwide. This can be seen very well in the behaviour of Chinese customers. Their levels of optimism and buying behaviour are fed exclusively by politics. If interest rates are lowered and people believe in supportive measures for consumers, they plan and buy. If there is bad news and uncertainty, demand disappears as quickly as it came.

This is what happened last week, when news from the Chinese economy immediately darkened the mood. The market was already very price-sensitive but customers were still willing to buy some hides in the end. This changed abruptly last week.

There was still a number of interested enquiries at the very start of the week but interest disappeared abruptly on the Monday afternoon.

We all know that, above all, buyers are once again coordinating activities, mainly in northern China. In Europe there was no activity other than sporadic deals for niche markets. We don’t know how others have fared this week, but as it stands, not much is likely to happen now until the ACLE show. It is hardly likely that anyone will make any major decisions before then.

The kill: There are actually no fundamental changes in slaughter either. Production and demand will continue to be in holiday mode for the next few weeks. In addition to beef demand, you can also see from production and quality that at the moment the slaughterhouses are only operating with skeleton staff. There are so many problems in the meat industry at the moment that are waiting to be resolved.

What we expect: We really can’t find arguments at the moment for any change in the market in the next few weeks. There is no need for major changes or the willingness to take a bigger risk. Wait and see continues to be the motto. Prices are still at a relatively low level for many types. Sustained higher prices will really only be achieved if there is evidence that leather demand will increase significantly from October onwards. Should this not be the case, the first question to be answered would be whether all the different hide types are priced correctly, according to their real value. Opinions differ widely on this, in particular on male selections, but one thing is certain: it will not be too long before the market points the way.

Share this story: