Raw material pipeline change will be good news for tanners
29/04/2014
According to the April 29 edition of the weekly newsletter (Leatherbiz Weekly), some sales of cow hides in particular have gone through recently at prices 10% or even 15% below the peak prices seen in March 2014.
The report goes on to say that the Hebei closures may have triggered the market correction, but are not the only factor; it says raw material and finished leather prices have been out of kilter for some time.
However, another contribution that the Hebei situation has made is that tanning capacity around the world had become too big in comparison to the volume of raw material available and to the demand for finished leather in footwear, automotive, accessory and other markets. Too many tanners chasing too few hides led to record high prices.
A lessening of that competition following tannery closures in China will help bring the market dynamic back into balance again. Lower raw material prices will help tanners establish better margins.
Leatherbiz Weekly is published every week. Its exclusive Leather Pipeline market intelligence report appears once every two weeks. To subscribe, please visit this link: Leatherbiz Weekly subscriptions.
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