What happened this week: The mindset for the week was basically one of Christmas and year end preparations. Business expectations were very low and – as usual – the opposite was true. Sales and interest were still quite active and even today (December 23) produced a very satisfying round of business. Again business was concentrated on bulls, kips, calf, ox and heifers. Interest in dairy cows was there and even in good volume again, but the weak US$ and low bids in €s made only a handful of sales possible. However, if one was willing to discount the market for January, a pretty large volume of sales could have been concluded and the bottom line was that if people are willing to buy it now, they will still need it in January. If the market continues to head further south, then it is more than likely that the same prices bid today will also be obtainable after the festive season. However, the biggest threat to the market remains the currency. The US$ hit another record low today. The financial markets can only find arguments for a further decline in the first quarter 2005 and this could eventually become the killer for the price trend in € terms. A US$ collapse can no longer be ruled out and the consequences will be dramatic for global economic stability and for the hide and skin business – at least in the non-US$ regions of the world.

Besides the currency effect, it seems that the situation is better than the mood. Taking the simple facts and numbers of sales and shipments, December 2004 was not the quiet month one would have expected. Yes, margins are not what they should be and the returns, due to the weak US$, are not sufficient. The unusually high kill has produced some inventory as numbers were higher than expected, but the global tanning industry has still consumed more hides in the last quarter than the general mood was indicating. So, in Europe at least, we continue to be trapped in the situation that the market remains controlled by price pressure and a general pessimistic mood for the foreseeable future and news about the difficult sections of the market (garment, upholstery) continues to dominate discussions and the way of thinking for the future. Indeed, it will be tough to leave this vicious circle any time soon, but, as indicated before, the mood is certainly worse than the situation and there are still many successful and profitable leather companies around that are thriving in the current situation. Trading prices throughout the week were almost entirely steady with only fractional changes to both sides.

The kill: The kill continues to remain strong and the plans for next week are already indicating a strong performance, considering that it is the last week of the year. Most sources expect a sharp fall in slaughter numbers in the first half or the whole of January, in response to the inflated numbers seen for the last 8-10 weeks. We feel that there is a lot of logic in this opinion and in particular the kill of bulls is likely to suffer.

What do we expect? There are strong indications that next week overseas buyers will remain active and be sniffing around for further bargains. This week more sellers will be at their desks as it is an almost normal working week. With a weaker US$ the general pressure on prices will persist, despite a more relaxed outlook on demand and slaughter numbers. However, general trading should be light in numbers due to the season.

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	Steady
	25/29,5 kg	27,5/28,5 kg	22/27 kg	25/26 kg	€ 1,35	Steady
Dairy cows	15/24,5 kg	22,5/23,5 kg	13/22 kg	20/21 kg	€ 1,35	Soft
	25/29,5 kg	27,5/28,5 kg	22/27 kg	25/26 kg	€ 1,25	Softer
	30/+      kg	33,5/35,5 kg	27/+   kg	29/31 kg	€ 1,15	Softer
Bulls	25/29,5 kg	27,5/28,5 kg	22/ 27 kg	25/26 kg	€ 1,50	Share this story: Leatherbiz.com cannot be held responsible for content if the language setting is changed from English. The translations provided by Google Translate are automated and therefore might not be accurate and may contain incorrect, offensive or misleading language. We offer this facility as a guide only.