This week: As we expected, last week was very quiet, almost uneventful. This is hardly surprising, as Asia is now slowly preparing for the interruption caused by the Chinese New Year (February 10) and in Europe we do not expect any major activity to take place beyond the stable and long-term supply relationships that cover basic requirements.

Nobody seems to need more hides or different types of hide at the moment and nobody expects to attract much interest with unsolicited offers. Prices have been very tight for a long time and whichever tanner you speak to in Europe, everyone will confirm that although it would be good to see prices fall further, the fundamental problem is not price but the order situation.

With the exception of a few specialised sectors, there is simply not enough demand for leather in Europe. If you look at the calendar, there is not much time left to land new orders in what is traditionally a period of strong production. As a result, everything continues to ripple along without any recognisable events that might alter this basic situation.

Activity in Asia slowed down considerably over the course of last week. On Monday and Tuesday, the already routine enquiries and bids for cow hides came in, but there were no longer any long, dynamic negotiations. Either you took what was offered, or the interest disappeared as quickly as it had come. The prices were always around $2 below what would actually be considered reasonable, but the willingness to negotiate prices was extremely low. Only for somewhat heavier hides was it still possible to talk about small increases.

Interestingly, we heard several times from China that the upholstery leather industry was complaining about a lack of export orders for furniture leather and therefore the competition for prices in the local market is increasing. As the furniture leather production season in China comes to a relatively quick end after Chinese New Year, it will indeed be very interesting to see how buyers behave in the coming weeks. Under normal conditions, the volume of demand alone should decline significantly for goods that would arrive after April. This week, too, one continued to get the impression that all parties involved have little expectation of major price changes in any direction, which is why they are not even attempting it at the moment. This leaves us with the question of whether, at this level, all hides are actually finding a buyer at the moment, or whether more product is stranded along the supply chain than some are willing to admit.

The kill: The situation with the kill is also uneventful. Neither live cattle prices nor production figures are fluctuating widely and volumes remain normal for the time of year. Hide weights are relatively heavy but also normal for the season, although they have not increased significantly for some time.

What we expect: It is true that the longer the calm lasts, the greater the likelihood that something will happen. However, it seems to us that the time for that has not yet come and there is much to suggest that price changes will have little effect on demand in the coming weeks. We therefore expect prices to remain largely stable in the near future. The next decisive turning point will probably be the Lineapelle fair in Milan (February 20-22) and there is not much time left until then.

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