German Perspective - 19.08.14
19/08/2014
The hide industry is not taking much notice and this is positive for selling raw hides, but could become dangerous for the tanning industry if things turn sour for leather demand. We are now in mid-August and many tanners have no choice other than to think about replenishment. With the low kill in the US and the rigid position of suppliers, interest in potential alternatives persists. Every week there are new customers knocking on the door for trials. This has nothing to do with regular business and we still miss our regular clients. It seems that they are covered. The All China Leather Exhibition in Shanghai is getting closer (September 3-6) and the first travellers have already begun to tour Asia.
At this stage we cannot really filter any news or real indications about leather demand for the coming season. What remains a bit strange is the fact that, despite the higher asking prices and all the reports stating supply problems and higher asking prices for grain leather, the split market does not show any sign of rising demand a rebound of prices. In Europe this is not really a surprise with the entire tanning industry still on holiday. In Asia, however one would have expected more interest in particular when hide prices are looking as firm as many have them.
Interest this week was again rather sporadic. There was a good number of enquiries for offer list and price indications, but far fewer bids than in the previous weeks. It seems that tanners are trying to obtain a full market overview in preparation for Shanghai and all the visits and encounters with suppliers they expect to hold in the coming weeks. Maybe it’s not this, but just a general information tour to calculate leather prices for the season to come.
Whatever the reason, the activity did not leave the impression of any short-term hunger for hides. It is true that letters of credit and payments are beginning to come in a bit better, which means that buyers have funds, but also that they want to have goods on the boat and on their way. Some may even have waited a bit long to convert their contracts into shipments. For two months, any excuse was being used to slow shipments down and we had around a 30-day delay on contracted shipping terms. Buyers are now pushing to get the material quickly onto boats and arrival times are requested to be earlier rather than later.
This means that the pipeline is full for the moment with these shipments and tanners will have to hold out for a little while before they replenish their inventories for arrival in the last quarter. It is clear that very little is clear; we might need to have a little more patience before we understand the market and leather demand for the coming season.
Sales this week have been patchy, with bits and pieces of cows and low grades, while the price ideas on males have been too far apart. Total numbers were less than in the previous weeks and not fully satisfactory.
The kill: No changes on the kill, unless it was possibly a fraction higher. Next week the first states in Germany end the school holidays so we might see beef demand climb a little. Weights in particular for cows are still quite low and should have gone up. The number of males in the slaughter mix continues to be pretty low still.
What we expect: We fail to see any reason why the market should change at all at the moment. People will now wait for the outcome of their Asian trips and the impressions they get from the All China Leather Exhibition. Prices here are still sheltered by the strong positions sellers from other origins are taking and this will continue to protect prices in our area from coming under pressure. At the same time buyers are not willing to pay more.
| 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 | € 2,45 |
Steady |
| 25/29,5 kg | 27,5/28,5 kg | 22/27 kg | 25/26 kg | € 2,05 |
Steady |
|
|
Dairy cows |
15/24,5 kg |
22,5/23,5 kg |
13/22 kg |
20/21 kg |
€ 2,20 |
Steady |
|
25/29,5 kg |
27,5/28,5 kg |
22/27 kg |
25/26 kg |
€ 1,80 |
Steady |
|
|
30/+ kg |
33,5/35,5 kg |
27/+ kg |
29/31 kg |
€ 1,70 |
Steady | |
| Bulls | 25/29,5 kg | 27,5/28,5 kg | 22/ 27 kg | 25/26 kg | € 2,20 |
Weak |
| 30/39,5 kg | 36,0/37,0 kg | 24/34 kg | 31/33 kg | € 2,25 |
Pressure |
|
| 40/+ kg | 45,0/48,0 kg | 34/+ kg | 38/40 kg | € 2,15 |
Steady |
|
| Thirds | 15/+ kg | 25,0/27,5 kg | 13/+ kg | 24/26 kg | € 1,75 |
Steady |
| Thirds bulls | 30/+ kg | 38,0/40,0 kg | 24/+ kg | 33/36 kg | € 1,70 |
Steady |
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