What happened last week: The week turned out to be quiet due predominantly to the Thursday holiday in most parts of Germany, Austria and Switzerland. Although the main tanning centres in Europe such as Italy and Spain were open, activity from these areas was also limited. Once again, the more tangible interest in the European market was in light material and plenty of enquiries were registered for weights of 5-20 kg.

There still seem to be a number of leather orders circulating in the market requiring coverage of adequately priced raw materials. We are too far away from the leather market to really understand if the orders for finished leathers will continue to favour this particular light material but, if this demand continues into the second half of 2005, raw material will become a problem in this particular sector. The rest of the market was busy administrating shipments and logistics. Sales were patchy, isolated and more a matter of a coincidence than a clear reflection of the tanners’ needs. Several containers of dairy cows and ox/heifers were sold but much fewer than in previous weeks.

Prices were steady but the firmer dollar helped calculations once again. Currency fluctuations are still affecting the market sentiment rather than the market itself, which is still divided into those who benefit from good shipments and the low kill, and those who are concerned mainly with the massive price pressure on finished leather, weak upholstery and garment leather demand and the rising financial problems of the industry in general. It is also a bad time for final judgements as we are running into the summer season in Europe and have no clear picture of the situation in Asia.

Following the logic and timing of the supply chain, we should see a rise in demand from Asian upholstery tanners and a seasonal decline from the European ones, contributing to another period of balance. The male market remains supported by the low kill. The next round of price negotiations in our part of the world will show if there is room for price increases in this preferred hide selection. While butchers strongly hope to convert the lower kill, which has lasted since February, into higher prices; tanners are still focusing on depressed margins and the falling prices of finished leather – not an ideal starting point. The seasonal drop in average weights is also working against the market and worries about potential payment problems in Europe over the summer are not making decisions any easier either.

The kill: The holiday in the west and the south of the country has reduced the total kill substantially. The north has remained untouched and the slaughter was slightly higher than expected and certainly better than last week. There is no indication of the kill rising above the low and steady seasonal levels in the next few weeks.

What do we expect? This week will bring little change and business in Europe will remain stagnant. Little trade is expected in males until the renewal of contract is due. Excess supply is hardly available but the pressure seems to be decreasing in the cow market. The higher rate of the dollar, reduced stocks achieved through decent shipments, the low kill, and US hide prices are all working as stabilising factors. However, they are not enough to propel prices to higher levels for the time being.

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	€ 1.55	Firmish
	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	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	€ 1.16	Steady
Bulls	25/29.5 kg	27.5/28.5 kg	22/ 27 kg	25/26 kg	€ 1.55	Steady
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.