Courtesy of Friedrich Sturm GmbH & Co. KG

What happened this week:

Now we are in the season of the short versions of the report. We can hardly remember a second week in July with so little general activity. The only generated sales have been with the regular programme buyers in continental Europe, where the contracts had to be renewed after the termination of the abattoir buying.

Almost all programmes where concluded at unchanged price levels and so the period of insufficient margins persists. This means also that for the coming holiday weeks most of the male hide production will be covered by sales and shipments. With the absence of the Asian buyers for dairy cows and the final week of shipments into Italy ahead of us, we are missing any activity to support the female market over the summer but fortunately the kill remains on very low levels.

More worrying is the payment situation with regard to Southern Europe and the increasing number of reductions and cancellations of credit insurance cover. Many tanners continue to complain about orders and colour instructions coming in very slowly and we believe that only the high quality specialty and automotive tanners are the only ones who are really busy. Most of the others seem to be very happy that the holidays are now finally arriving.

The kill: The slaughter numbers improved moderately last week and we failed to find any particular reason for this. With the increase of the slaughter numbers so too did the hide weights, with particular gains seen in the male sections. We assume that the two increases were coincidental.

What do we expect? For the coming week things can only slow down further with more tanners shutting down for their summer holidays. Only a round of interest from Asia could generate some market movement, but to be quite honest we don’t think this is going to happen. We don’t expect any change in the official prices for one simple reason: Lack of activity.