German Perspective—09.09.08
10/09/2008
What happened this week: After the long summer break most of the leather pipeline was gathering in Shanghai for ACLE, which has become the first trend indicator of the leather business of the rest of the year.
Although the event takes place before many other fairs for finished products, it is the first chance to meet customers and suppliers from all over the world and to get a better picture of the market situation around the globe.
Attendance this year was pretty good on the first two days; some were surprised that, with the general depression, so many people made their way to China again. Well, maybe the depression is the real reason why so many people actually went, to see if there is light at the end of the tunnel.
As far as we are concerned we found that the show was basically just confirming what everybody already knew or felt before. The upholstery business remains extremely dull. The idea that measures introduced for the Olympics had forced tanners to stop production was, it seems, incorrect. Tanners were seemingly happy to have a reason to reduce production because they had no orders anyway.
Chinese upholstery tanners are still reporting a very small order book and most of them still have reasonable inventory of deliveries from the first quarter, which came with reasonably expensive raw material prices. There may be a few examples of tanneries whose business levels are near normal but they are isolated cases.
Most tanners are now hoping for the autumn tradeshows for finished products in the hope that orders from retailers will improve or have just been delayed. If leather demand does not pick up, it seems that it is going to be a pretty rough time for the leather sector for the next at least six months.
The situation is still better in the shoe upper market. In general sellers are quite busy and hides that are suitable for this kind of production are being traded in at least satisfying numbers.
For European suppliers there has been great relief from the currency market. In the end a reasonable amount of male hides were traded again. This at least applied for hide weights up to 40 kilos. There was further bad news for the extra heavy hides with additional cutbacks of production in the European automotive tanneries. If things go really wrong and tanners are not willing to absorb heavy hides at reasonable prices for better times in the future, it could be interesting to see if these extra heavies eventually also find export interest overseas. To summarise the week, we dare to say that the drama in upholstery still continues while the shoe sector remains amazingly steady despite the general economic downtown around the globe.
The kill: The kill continues to increase and after the long summer break the weekly slaughter is now reaching again acceptable levels. Weights still remain below average, but also this should improve soon.
What we expect: We don’t think that September is going to offer us much change. A lot of tradeshows for finished leather are ahead and only after they have closed and tanners have a clear picture about the manufacturing interest will we be able to make a forecast for the rest of the year. Until then we remain negative for upholstery and neutral on shoe-upper related hides. An extended rise the US dollar would certainly be appreciated and would help ease the general pain in export trades.
| 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 | € 1,40 | Steady |
| 25/29,5 kg | 27,5/28,5 kg | 22/27 kg | 25/26 kg | € 1,30 | Steady | |
|
Dairy
cows |
15/24,5
kg |
22,5/23,5
kg |
13/22
kg |
20/21
kg |
€ 1,40 |
Weak |
|
25/29,5
kg |
27,5/28,5
kg |
22/27
kg |
25/26
kg |
€ 1,20 |
Weak |
|
|
30/+
kg |
33,5/35,5
kg |
27/+
kg |
29/31
kg |
€ 1,02 |
Weak |
|
| Bulls | 25/29,5 kg | 27,5/28,5 kg | 22/ 27 kg | 25/26 kg | € 1,45 | Steady |
| 30/39,5 kg | 36,0/37,0 kg | 24/34 kg | 31/33 kg | € 1,30 | Steady | |
| 40/+ kg | 45,0/48,0 kg | 34/+ kg | 38/40 kg | € 1,20 | Steady | |
| Thirds | 15/+ kg | 25,0/27,5 kg | 13/+ kg | 24/26 kg | € 1,00 | Steady |
| Thirds bulls | 30/+ kg | 38,0/40,0 kg | 24/+ kg | 33/36 kg | € 1,00 | Steady |
Share this story:
