This week: Recent main developments have not come from any spectacular new sales or market activity, but rather from a growing realisation: the use of cattle hides outside of traditional tanneries and the leather industry continues to gain ground.

Naturally, this remains a matter of price: the revenues achieved are far from a cause for great celebration. Yet it is evident that many sellers currently welcome the alternative outlets now available for their hides. Whether these new channels will truly absorb all hides generated from ongoing kill remains to be seen in the weeks ahead. It is important to note that only a limited portion of the material produced can even remotely achieve the returns required to cover costs.

For now, these alternatives should therefore be regarded more as a temporary solution than as a genuinely profitable business. In addition, the long-term sustainability of these sales routes is uncertain; they will likely be tested once suppliers start seeking higher prices. For the moment, many market participants seem content to secure outlet stability until the end of the year.

In the leather sector itself, conditions have not changed significantly. There continues to be interest from overseas buyers, though they remain extremely price-sensitive. In plain terms, higher prices are currently not achievable, and the weaker US dollar is again eroding returns. The differences may appear minor, but when margins are already thin, even small movements can have a noticeable effect.

In India, certain relaxations for leather exports have been introduced, and final decisions regarding US tariffs are expected to bring clarity in the coming weeks regarding the market potential there.

In Europe, meanwhile, the situation remains tense. Fully integrated tanneries have shown no signs of a meaningful recovery in business or demand. The main challenge continues to lie on the abattoir side, which remains heavily influenced by political and strategic decisions and less by real market conditions. The logic behind certain actions is often difficult to grasp. Price-wise, little movement has been seen this week, and new price levels for the remainder of the year are expected to be negotiated next week.

The kill: Slaughter activity continues to rise gradually. However, the parameters on the beef market have shifted considerably. Prices for live cattle are falling, which is hardly a surprise under current retail conditions. Consumer demand at these high price levels has been disappointing, and beef exports have also lost momentum. Milk prices are falling. There is little reason to expect a near-term turnaround; the real question is rather how much further live cattle prices will decline.

What we expect: Next week, final price negotiations with European tanners will take place. Discussions will likely include agreements and planning into early next year. Anything other than a downward price adjustment would be a surprise. From today’s perspective, it seems less a question of if and more a question of by how much. Expensive hides are simply too costly for the current leather market environment.

Price Table

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