This week: We must continue to bid farewell to old habits and certainties. Normally, this time of year is marked by the highest slaughter volumes and the highest production levels in the leather industry. If nothing else, companies try to finish and ship as much as possible before the Christmas break. This phase usually ended in the last week before Christmas, and depending on order volumes and internal planning, businesses went on holiday for one or sometimes even two weeks. This year looks somewhat different.

Slaughter numbers are significantly lower than what one would expect for the second half of November, and production in tanneries is dragging along rather than showing any indication of a seasonal peak. The reasons for this are well known, at least within the leather industry. In no part of Europe can we speak of anything resembling normal leather demand for this time of year. Therefore, companies are trying to adapt as best as they can to the circumstances, which is not easy, given the minimum volume required in any production facility. 

The problem that results from this is familiar to anyone who runs a business. However, its effects often become visible only after a long delay. This means that Europe currently finds itself in an industrial ‘no-man’s-land’. No meaningful discussion is taking place along the supply chain either, as the meat industry is also struggling with similar challenges, albeit in a different way.

Commercially, most decisions for this year have been made, and only a few tanneries still need to cover demand until mid-January 2026. In Asia, the Chinese New Year (February 17) is already casting its shadow, as Europe will be sending out its last shipments before that holiday in the coming weeks. The next possible shipments will likely not take place until late December at the earliest, and realistically probably in January.

This leads us to the next issue awaiting final resolution: the European deforestation regulation. It has been repeatedly revised, and a final decision will be made this week in the European Parliament. Whatever efforts were made in Brussels to save the project, it can only be described as a resounding failure. It borders on absurdity, for which arguments are still being put forward in an attempt to find a political solution. Anything other than a one-year postponement and a full, realistic revision of the regulation would not only be a waste of time, but further proof that Brussels operates in a bubble far removed from reality.

Then there is the trading activity that everyone looks at each week. Last week, there was little to observe. In Europe, the last outstanding contracts for deliveries for the rest of 2025 were being finalised, and in Asia, there seemed to be little interest in additional purchases. It appears they have several weeks before new demand emerges for arrival toward the end of February. As a result, prices remained largely unchanged, supported by almost stable purchase prices at the slaughterhouses. Whether this will ultimately help the situation remains questionable.

The kill: As described above, slaughter numbers are somewhat elevated, but nowhere near the peak levels expected for this time of year. Although temperatures have dropped significantly, this has not been reflected in the prices for live cattle. The retail sector reports that current beef prices are not meeting much consumer demand. Hopes now rest on a more active Christmas season. Normally, colder nights would bring more live cattle to the market, but if beef cannot be sold at current prices, there is little incentive to produce more. Farmers and slaughterhouses appear to be placing their bets on the future, assuming global demand for animal protein will continue to rise while supply in some regions remains limited — implying prices should remain stable.

What we expect: There is little indication that anything substantial will change in the coming weeks. The industry will first look to the European Parliament’s decision on the EUDR, though even that is unlikely to alter leather demand meaningfully, and may be instead trigger postponed or delayed decisions. With price movements also minimal in other international markets, it seems likely that we will be waiting some time for the next trigger for market change.

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