What happened this week: The first week of May gradually became a non-event. Most of the Asian countries had their week’s holiday and activity was further reduced by many parts of Europe taking Thursday off. So, although most businesses were open, activity was very slow and most people were busy with administrative matters. Tanners who attended the show in Bologna were using last week to summarise results and discussions with their clients, rather than to think about additional activities on the raw material market. We have to bear in mind that the raw material market is still divided into two entirely different market segments. One is the economical upholstery and the other one is the rest. While the upholstery continues to face the usual problems, the other one is enjoying the recovery which, in our view, is not valued and appreciated enough.

The general tone of the market remains uncertain and, when speaking with colleagues or reading market analyses, pessimism remains in the foreground. This might be justified by current economical results but may prove a little exaggerated once the leather business is evaluated as such. Hide trading remained reasonably quiet last week, not a surprise considering the number of potential clients on holidays and inability of the market to acquire what it wants.

The very low slaughter is causing more and more headache in many grades. Heifers, bulls, calf and kips are simply not produced in the numbers the market currently requires. Most of the existing stocks that were still available due to the high slaughter at the end of 2004, have slowly but surely been absorbed and some tanners now have to decide either to reduce production or to check alternatives to compensate for the lack of their preferred supplies. We find the situation a bit more mysterious in the dairy cow market. Although the supply is not really excessive, there are rumours of low prices from Italy. We have no proof so far that sellers have surrendered and accepted the low bids in volume. So far it resembles the classical besiegement of the sellers of fresh, chilled hides prior to the summer season.

In any case, with the present state of the upholstery business and the prices for low grade finished leather selections, the market for this type of standard material is extremely volatile and nervous. Suppliers with insufficient salting and warehousing facilities now have to make their decisions for the summer holidays, because once the needs of regular fresh material buyers are satisfied, there are very few options left. Contract blueing which for many has been the solution in recent years is, as far as the economics are concerned, not an option this year.

The kill: Production, at least in our areas, remains very low. Last week’s holiday and another one this week (Monday) do not make it easier because the kill is dropping more than the soakings and it is on insufficient levels. There remains little reason for a change in the near future.

What do we expect? The market will soon have to make a decision if it is going to continue to be entirely demand-driven or if the reduced supply will eventually take an effect. The logic would be that the price spread between bulls/heifers and dairy cows is going to increase, while it only has to be decided if one item moves alone or both in different directions.

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	€ 1.50	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	€ 1.45	Sluggish
	25/29.5 kg	27.5/28.5 kg	22/27 kg	25/26 kg	€ 1.28	Sluggish
	30/+      kg	33.5/35.5 kg	27/+   kg	29/31 kg	€ 1.18	Sluggish
Bulls	25/29.5 kg	27.5/28.5 kg	22/ 27 kg	25/26 kg	€ 1.52	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.