This week: European tanners are almost all on holiday and as for our customers in Asia, if they show up at all, they are trying massively to lower prices again and are obviously trying out their chances of success everywhere. In most cases, this means that sellers shrug their shoulders, because on the one hand the bids for poorer ranges and, in some cases, for cows hardly cover costs.

On the other hand it can be assumed that, in the worst case, sales at these low prices will still be available in a few weeks’ time. With the price levels that have now been reached, the only question is whether the demand for leather in the last four months of 2024 will be sufficient to absorb the amount of raw material available and generate a cost-covering yield for many hide types. If not, at least parts of the product range will go for disposal.

Of course, this only applies to some of the goods; male types are not yet threatened by this, but the scenario still needs to be considered, even if many are obviously not yet prepared to consider it.

On the seller’s side, hope that prices will recover with the end of the summer holidays and the seasonal upturn is still persistent. By October at the latest we will know if these hopes have been realised.

After the relatively high numbers in the first five months of 2024, the summer kill is now very low. This also supports sellers’ hopes that prices will rise again. In our view, however, the key mistake being made with this idea is that leather prices will certainly not rise again quickly. Tanners’ production costs has risen further, leaving a correspondingly smaller share for of the budget for raw material. To complete the reality, however, it must also be mentioned that for many leather factories the price of raw materials is still not the central problem, but rather the order situation, and this is also reflected in the calculations.

As has been the case for a long time, sales this week were rather random and sporadic. Bids from Asia for cows were once again very ambitious and therefore not really acceptable. If you don’t want to liquidate stocks, you will still be able to find buyers in a few weeks at today’s prices. Due to the low level of the kill at the moment, there is no increased pressure to sell and therefore, in addition to the summer rest, the principle of wait and see continues to be the programme.

The kill: As mentioned above, the kill is now at a very low level. On the one hand, this is due to the summer holidays, but on the other hand it is also due to a certain shortage of live cattle and therefore rising prices. Overall, the meat industry has reported that it is producing less than it would like to. It is unlikely that much more will come onto the market in the next few weeks or that the current situation will change fundamentally.

What we expect: We do not see any major change. The market is divided into different realities and everyone can decide which one they would like to be in. There is no solid basis for business in the coming weeks, so everyone can create their own reality and wait and see if their hopes materialise. There is still a considerable amount of price risk in some segments and it would be better to reduce this risk again before the last quarter. 

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