What happened this week: Business is certainly progressing towards the end of the year. Those who have already closed their books for 2004 are busy planning production and deliveries, while others are filling small production and delivery gaps that had been left open. Trading volumes have not been exceptionally high this week but an acceptable number of sales in smaller contract volumes were concluded. With the dollar settling down towards the end of the week, interest from Asia has been noted once again, mostly for the side leather production. This seems like a clear signal for the time being. The other clear trend at the moment is that shoe upper leathers and good quality leathers are facing a steady demand. The biggest market problem is in upholstery leathers. The excess capacity built mainly in China over the last year or so is now taking its toll. Dumping prices of finished furniture leathers to keep production running and to collect capital is giving the entire industry a headache. With little hope for improvement in this sector, rumours are spread of upholstery tanners in Asia considering switching their production to shoe leathers or even entering the automotive market. With both sectors currently having sufficient production capacity this would not solve but only shift the problem to another area. At the end of the day, the entire leather market is in a sustainable process of transition that allows some specialty tanners to operate on adequate margins. These circumstances are keeping the general hide market prices under control. We do not share the general opinion that the leather business and, consequently, the demand for raw hides are significantly lower than a year ago. We simply believe that the excessive capacity is leading to wrong conclusions. More production struggling to obtain enough business does not necessarily mean that the total amount of orders is reduced. Prices this week have continued to settle down. There are no hopes for a firmer market in the forthcoming weeks but at least the severe pressure we have seen for so long is now lifting. It seems that the major part of price adjustment has now come to an end, provided, of course, no ‘external’ turbulences appear. Prices this week have stayed at almost full asking levels, making few happy, and were workable with the slight correction of the dollar towards the end of the week. Shipments and L/Cs have been a bit easier this week, with arrivals requested before the Lunar New Year break in Asia, yet not so easy to achieve with vessels booked up to the brim. The kill: True to our earlier predictions that a strong kill – particularly of bulls – would take place towards the end of the year the kill remained at a high level. With Christmas falling on a weekend this year it will be higher and more regular this December than most years. In the coming weeks we expect more decent numbers which may slow a little prior to Christmas but generally remain quite high. What do we expect? In our view, the market will continue to settle. High slaughter will keep enthusiasts under control and a significant change in price levels seems highly unlikely this year. Market atmosphere will remain linked to the present selling position of individual suppliers.
|
Type |
Weight range |
Avg. green weight |
Salted weight |
Avg. weight salted |
Price per kg green weight |
Trend |
|
Ox/heifers |
15/24,5 kg |
22,0/23,5 kg |
13/22 kg |
20/21 kg |
€ 1,45 |
Settling |
|
|
25/29,5 kg |
27,5/28,5 kg |
22/27 kg |
25/26 kg |
€ 1,35 |
Settling |
|
Dairy cows |
15/24,5 kg |
22,5/23,5 kg |
13/22 kg |
20/21 kg |
€ 1,35 |
Settling |
|
|
25/29,5 kg |
27,5/28,5 kg |
22/27 kg |
25/26 kg |
€ 1,25 |
Settling |
|
|
30/+ kg |
33,5/35,5 kg |
27/+ kg |
29/31 kg |
€ 1,15 |
Settling |
|
Bulls |
25/29,5 kg |
27,5/28,5 kg |
22/ 27 kg |
25/26 kg |
|
