This week: The end of the year is slowly approaching and questions about interruptions of shipments to Asia owing to the holidays are taking up more and more space. This means less attention is paid to the raw material market and the purchase and sale of hides and skins. One is more and more concerned with logistics, planning, payment and with the question of how to assess the development of the next few months.

Here and there, an order for the delivery of leather comes, often to be fulfilled at relatively short notice. However, these are not for large quantities of for standard products that would enable ongoing smooth production. Rather, they are gap-fillers and specialties that are to be delivered quickly before the end of the year. 

The end of the year is already being felt very clearly in the automotive sector, and more and more of our customers are reporting sudden drops in customer call-offs. Considering that many companies are already planning inventories for the end of the fiscal year, this is not a big surprise. It is no longer a secret that the automotive industry in Europe is currently going through a very difficult time and the negative news is now coming in almost daily.

This also means that companies do not want to keep larger stocks of material, because according to everything we know today, production will not recover quickly even at the beginning of 2025. Planning uncertainty in this sector, which is still so heavily dependent on exports, is provided by the question of how US trade and customs policy will continue. There are also no impulses from the other European regions known for their leather production. The news remains rather negative. One has the feeling that many want to avoid conversations about the future.

This leaves only Asia at the moment and basically the firmer US dollar should help exports and business. However, it was also quite quiet there. As every week, selective requests come in and most of the time these are for heavier hides. Despite the firmer dollar, however, most talks fail in the end because of the price. Some colleagues report a demand for the standard cowhides, but we have to admit that we are not favoured by this at the moment.

This means that sales remained rather below average last week and were limited to individual deals for special and selected goods. Prices changed very little; in the end it was a decision whether to agree on a compromise or not.

The kill: Slaughter has now stabilised at the usual seasonal level. The quantities are not extraordinary, but they are absolutely what you can expect for this time of year. Under normal conditions, there is nothing to prevent this from continuing at least until Christmas. If the weather temporarily becomes significantly colder again, then it could of course be that there will be weekly, short-term jumps in slaughter volumes again.

What we expect: At the risk of being considered unimaginative, we cannot see what could have a strong influence on market prices in the coming weeks. There is no great interest in significant price changes, and the approaching end of the year is certainly playing a significant role. Nevertheless, the day is coming when we will have to think about how demand and the situation in the leather industry is to continue. Europe remains the problem child. Sooner or later solutions will have to come, either from a significant revival in demand for leather or from a reduction in capacity. 

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