This week: Even though the fundamental situation has not changed, there have been a few things that have caused a stir. Firstly, of course, the major fire at Ecco Leather in the Netherlands, which completely destroyed one of the largest leather factories north of the Alps.

Then there was the news that the Vitelco leather factory, also in the Netherlands, will be closing its doors voluntarily in the near future. It was not really expected that the production capacities in Europe would reduce in this way. Of course, this has no direct impact on the hide market, as the leather industry currently has sufficient capacity to absorb additional quantities for production, if required.

As there is still no definitive conclusion to the dispute over tariffs between the US and China, the pressure to find alternative markets for raw hides from the US is increasing. Of course, this particularly affects cowhides, but other types are also affected. The effect is becoming more and more pronounced and all raw materials that can be replaced by US hides have to face this pressure.

Awareness is also slowly growing that international logistics will also be massively affected by the trade conflict. There are still many different opinions about the effects, but it is difficult to expect any positive effects. There is some relief worldwide at the moment due to the fall in the kill almost everywhere. The problem would of course be much greater with normal production.

For us, the market remained completely paralysed last week. Somehow you can’t help but get the impression that all producers and tanners are currently trying to withdraw from the market as much as they can. The reduced kill gives the suppliers some breathing space and therefore the great pressure to agree on new deals and prices has not really built up yet. However, everything stands and falls with the prices that will soon have to be agreed with the slaughterhouses for the coming weeks.

Anything is possible in our business and sometimes people come up with great ideas. However, in view of the current situation, it would be grossly negligent at the moment not to take account of the huge numbers of available hides from the US.

It should not be forgotten that even before April 2, Liberation Day, demand for leather was not sufficient to fully absorb the supply of hides. Relatively little has changed in terms of price this week. Lower grades and favourable female hides continue to be covered by collagen production options. For male and heavy hides, the pressure is starting to build up further, even if the low kill is still giving suppliers some time at the moment. However, this does not change the parameters of the market. The next two weeks will show the results and how the big players in particular are dealing with the situation.

The kill: The kill remains low, even though there was no further public holiday-reduced production last week. Obviously there is still too little cattle supply, which on the one hand makes it difficult for slaughterhouses to fill their production, but on the other hand is not necessarily surprising for this time of year. In our region, nature is about four weeks ahead of schedule, which also means that the cattle are already finding sufficient feed in the pastures.

What we expect: Because of the low slaughter rates, we believe that the market for cheap hides is well secured and the only thing that needs to be considered is if the collection and processing costs can be covered. This is already very difficult with smaller productions. We are expecting tough negotiations for male hides, as on the one hand the productions in the leather factory have to be filled and this is not too easy with the low kill every year in spring and summer. On the other hand, we have no reason to believe that the leather business has improved in any way, which means that pressure on prices from customers for males is likely to increase. Of course, global influences also play an important role here.

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