US Perspective - 10.2.15
Courtesy of The Maxfield Report
www.themaxfieldreport.com
Last week saw offer lists of packers a bit more populated, while we saw some of tanners’ favoured selections (regular weight HTS/ BBS/BS) offered, while the rest of packers’ offer lists were comprised mostly of Jumbo and Super-Jumbo steer selections. As to asking prices, sources shared that price ideas from packers on regular weight selections were in line with their last asking prices, while price ideas on heavier weight selections $1-$2 lower than the week prior.
In the meantime, sources share trader activity was noticeably more active last week, while agents for the packers were pushing hard to convey a message of a steady market. Overall, popular opinion of the trade is that enquiries from buyers were not nearly as active as the week prior and this is attributed to the fact several medium to smaller-sized tanners had already closed for Chinese New Year, citing leather orders that were disappointing compared to levels of a year ago.
As to trading levels, some sources claiming regular weight HTS sold at levels of $103, while there were rumours of sales as low as $101 delivered, which we suspect, if true, depended on origin and shipping times. On the surface, most sellers insisted they could sell at levels of $112-$115 delivered, depending on weight average and origin.
Elsewhere, tanners still appear as if they value BBS more than HTS and even HNS.
This is leading to reports of sales for BBS as high as $110-$111 delivered, while sales of HNS a dollar behind this.
Overall, consensus was that prices for big packer hides were steady to slightly softer last week, and opinions were mixed as to whether lower prices were a result of the various problems associated with West Coast port strikes, or if packers lacked the sold-forward position many are advertising.
In addition, the usual problems associated with approaching Chinese New Year are also to blame with most tanneries indicating beam house operation and finished operations are now closed, while most front office operation will be closed by the end of this week.
Members of the cowhide trade report they were disappointed with the amount of interest they saw last week, especially after enjoying some decent sales the past couple of weeks. Reports from a number of sources claim that sellers met a fair amount of resistance to higher prices, and towards the end of last week, producers who did not possess the same sold forward positions as their competition appeared as if they were a bit more willing to negotiate prices.
In regards to prices, producers were backing off claims that they could sell HNDC at levels of $85-$86 delivered, as we were hearing sales concluded at $83 delivered. Meanwhile, prices of HNC drifted a bit last week with sales reported a dollar under their traded levels of the week prior, while it appears HBC were able to hold steady.
THE LOOK AHEAD
As to what we expect for this week, we suspect that offer lists will be at least equal to last week in terms of the selections and number of hides offered, while we suspect the majority of sellers are likely to come out with asking prices similar to last week. In the meantime, as we are moving closer to the Chinese New Year, there will not be as many buyers in the market place and essentially, several members of the trade have acknowledged that this will be their last chance to conclude business until next month.
Meanwhile, there continues to be numerous problems stemming from the situation on the west coast and certainly having an impact on the market, as well as some troublesome shipping delays. In addition, cash flows for tanners, traders and producers are being stretched, while empty container availability is also starting to become an issue. The good news is that harvest levels are running at all-time low levels and we will have to see how those selling hides manoeuvre moving forward, but for now, we continue to lean towards a slight undertone continuing on prices.
