This week: Without any major positive surprises, we will still have to deal with the issue of reorganising the marketing of hides, which will probably not happen without structural changes. So we expect another week of perceived boredom with few changes. It is probably even more difficult at the moment than it has been since the beginning of the summer to publish anything meaningful about our market for cattle hides. This September is no exception, as usually people return from holiday and immediately expect big new orders or new insights into the business. This has rarely happened before and this year is not much different. 

It is very easy to see that hide prices have remained almost completely unchanged for a long time. If there have been any influences, they have tended to arise from circumstances that have less to do with supply and demand and more to do with events in global politics. The only cause for concern in this respect is the April announcements on customs policy from the US or the continuous fall in the US dollar, which has a correspondingly negative impact on revenues in euros for all overseas export transactions.

We are now dealing with distortions in our market that also have nothing to do with the question of supply and demand.

There are market participants who already in August and now in September are falling back into the old pattern that volume is the important factor for market position. They may or may not share this view, but higher purchase prices at the slaughterhouses do not reflect the actual situation on the world markets. This week, too, we were unable to find any real and convincing information and arguments that would justify higher hide prices in the short term. It is rather the case that we have to assume increasing price pressure on finished leather prices and this does not make calculations in the leather industry any easier, especially when you consider that there are still considerable stocks of semi-finished goods waiting for orders. It will probably be some time before we see how these Gordian knots can be cut.

In business terms, there was fortunately some interest and movement this week. Buyers from China in particular continued to try to purchase goods on the basis of the deals concluded during the All China Leather Exhibition in Shanghai at the start of September. In principle, this is only ever about female hides, which are probably initially only bought exclusively for the lime splits and to keep production running.

Of course, you also need a certain amount of confidence and hope that the grains can be successfully turned into leather at some point and will find a home in finished products. Seen in this light, this is often a hope for the future that is not really backed up by facts. Prices have changed only marginally, if at all, and the influence of currency sometimes plays a greater role than the price changes themselves.

The kill: Livestock prices remain very high. Otherwise, little has changed. Even the end of the holidays has not yet been reflected in a significant change in the kill. The feedlots either do not yet have enough cattle that are ready for slaughter or they are banking on prices rising even further. The demand for beef and the need for meat processing is apparently still allowing relatively high prices to prevail and the weather conditions are also supporting this overall environment. It does not appear that anything fundamental will change in the coming weeks and only a significant change in the weather to autumnal conditions could be a trigger for a change in the market.

What we expect: Any major movement and change in the market this week would be a big surprise. In the following week, most people will make the pilgrimage to Milan for Lineapelle and there, or in the week after, it will slowly become clear what can be expected for the leather business for the winter season.

Price Table

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