What happened this week: The situation is developing further into a October classic. The seasonal increase in the slaughter meets a tanning business which is still in the process to find a sufficient order base for the coming season. With the frightening situation in the tanning industry  in Italy and in part also in the other Mediterranean countries not enough short term demand in Europe is generated to easily absorb the present slaughter. Holidays in Asia, scattered local holidays in Europe and  leather fairs, such as for furniture and shoes in Germany and the upcoming Lineapelle in Italy keep tanners interest at present more on sales and their market perspectives rather than action in raw material procurement. This puts suppliers from many countries, which run a ‘0’ stock policy or dispose of  insufficient warehousing facilities  under massive pressure to stimulate their customers desire to buy the hides they want/need to sell. This applies mainly to UK/Ireland and creates this classical October scenario with a massive and short term pressure on hide prices.

That’s the situation we are in at present and it is difficult to handle, because the price  spread between the different markets is wider than ever and many are again too much influenced by the moment. We believe, that the present market adjustment is just the correct and necessary correction of the stupid upturn the market took at the end of August. There was no change in the quality of the market conditions against Before the holidays then and it was only the mixture between hope and a short term currency movement. So, the correction of prices taken place in the past weeks was a logical consequence and prices have been corrected to a solid level. The question now is: Will the global leather production falling in the months to come? Most likely not. Will slaughter rise globally? Doesn’t seem like that. So, we are in the classical period of unrest until things settle down  and markets find their correlations again. So, we might see still some surprises in the weeks to come and a large trade fair such as Lineapelle is always good for stronger vibrations, but there are good reasons to believe, that the market settlement

is at the beginning, if one values the market for a longer period. Sales during the week were scattered. The regular sales programs are scheduled for the coming week. So, sales were a bit here and there, but mostly overseas and for heavy material. In cows sales were slow, with Asian customers being partly on holiday mood and garment tanners very quiet. In Italy all kind of prices were quoted, but we believe that only small volumes have been actually sold. Abattoir prices for October have not The kill: The kill stays on the seasonal highs. Mainly the slaughter of males is compensating at present for the missing volumes of the second quarter. Weights are also slowly rising, so from the supply situation things are satisfying. What do we expect?: The pressure will continue, because we still suffer from the market levels in other European origins. However, we think that the market has a fair chance to settle at least in the medium lower price hides, because there is enough demand. Higher priced hides might still  struggle, because this is the segment where most of the price problem exists. However, leather production is not stopping and the supply will keep things under control eventually.

Dairy cows

15/24,5 kg

22,5/23,5 kg

13/22 kg

20/21 kg

€ 1,75

Softer

25/29,5 kg

27,5/28,5 kg

22/27 kg

25/26 kg

€ 1,53

Steady

30/+      kg

33,5/35,5 kg

27/+   kg

29/31 kg

€ 1,30

Steady