What happened this week: As expected business continues to be lethargic. Each week starts with hopes for improvement and this time a positive turnaround is in sight. The grip of leather prices still controls the market and, at least for the time being, tanners avoid buying more than necessary and only for a very short term. This applies mainly to customers from abroad buying salted material. Market conditions and the business environment are currently adverse, at least in upholstery leathers, and excess production capacity gives leather buyers the upper hand in price control. The most common comment in the trade at the moment is: “Prices have to come down. My customer wants to spend less.” None of this is new and it is also behind the current market situation. Prices of upholstery leathers are no longer stimulating demand and some believe that the price erosion of finished leathers has also resulted in a falling demand. In the current situation we have to recognise the fact that the demand for economical hides is not strong enough to absorb the global offer. This would have been hard to imagine several months ago when price pressure shifted the demand into more economical sources, absorbing most cheap material available. This does not seem to be the case for the time being and tanners are struggling to find profitability. How difficult calculations and business are at the moment is best seen through the increasing number of market and petty claims. Here clients are testing how much they can squeeze out of a supplier without damaging the relations or looking too foolish. This is an obvious symptom that shows tanners do not have enough business and that calculations are tight. Side leather customers are still delivering more excitement and the segment claimed most of the isolated sales last week. Light and extra heavy materials were the only ones in demand last week but volumes were poor. At the end of the week the firmer dollar trend made price offers for overseas exports more attractive but it also put buyers off. Asian customers are currently in a “stand by” mode, anticipating the arrival of visitors to the APLF in Hong Kong. It also seems that the side leather business is faring better in Asia than the upholstery sector.

The kill: Slaughter last week was very low, in particular the kill of bulls. The hope that retailers will take more inventories for the Easter break did not materialise and the overall numbers were very low. This caused a supply bottleneck in fresh bulls which is bound to have follow-up effects in the weeks to come. However, we are now entering a low slaughter season and cows will return to the fields in a matter of weeks. All in all, the outlook for the kill is poor.

What do we expect? We think trading will be on the slow side this week. If the firmer dollar trend persists, the prospects for cow sales will improve as prices will gain a competitive edge again. There is now a reason to believe that tanners will buy actively before meeting potential suppliers at the Hong Kong leather fair. We still do not expect any changes in prices. The firm dollar is good for cows while bulls are safeguarded by the lower slaughter.

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	€ 1.33	Steady
Dairy cows	15/24.5 kg	22.5/23.5 kg	13/22 kg	20/21 kg	€ 1.40	Steady
	25/29.5 kg	27.5/28.5 kg	22/27 kg	25/26 kg	€ 1.28	Steady
	30/+      kg	33.5/35.5 kg	27/+   kg	29/31 kg	€ 1.18	Steady
Bulls	25/29.5 kg	27.5/28.5 kg	22/ 27 kg	25/26 kg	€ 1.52	Steady
	30/39.5 kg	36.0/37.0 kg 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.