German Perspective - 24.11.15
24/11/2015
Consequently they don’t feel much of the problems that are occurring as a consequence of the decline in leather demand. However, how many tanneries can really be put into this bag? Not so many really and they can certainly not absorb all the hides globally produced. This means you have a number of suppliers very comfortably positioned and many others still desperately looking for sales.
They at least have been able to stop the downward trend in prices, with a few even trying to call the market a bit higher and better. The problem is just that they still can’t find enough interest and buyers, because the group of busy tanners is obsessed with quality and consistency and cannot even be wooed by large discounts. Running downthe various offer lists and the sales made, it is remarkable to see such a spread of prices between hide types, suppliers and origins. Much of it seems not really logical at all. This has been the situation for a while.
Tanners are presently more than ever before obsessed with quality. The raw material has to fit exactly to the leather orders, without anything that is too good, (the tanners don’t want to have to pay for that because they know they will not get any extra return for it), but absolutely not material that is of too low a quality to use and will end up in their warehouses, because there is no demand for it at any price. In particular in Asia tanners are complaining about swelling inventories of low grades. All this is directing the demand more towards quality raw materials, which consequently have good support while the rest tries to take advantage from it, hoping that the interest will spill over. Generally this has led to a more stable situation, with sellers regaining some confidence. It will be next year before we know if this is going to bring rewards.
Sales this week have been again pretty regular with the normal long-term buyers. Prices were pretty steady in general with some further marginal declines for bull hides. Although still needed, these look comparatively expensive and so a concession here and there has to be made to keep good relations with quality buyers. Asia was still interested in dairy cows, but when it came to higher prices one ran up against a concrete wall, at least with the good and reliable clients. Sales overall were satisfactory, without being overwhelming.
The kill: The kill continues to run at higher seasonal levels, but there are far more females in the mix than we expected. The weather will get much colder next week and there has been plenty of rain. This, in combination with the upcoming Christmas season, push numbers higher.
What we expect: Sellers will most likely continue to test the upside potential of the market now. We expect limited success and it will be interesting to see how much demand there is from Asia for the time after their holiday at Lunar New Year (around Monday, February 8). European tanners are done for this year and have bought what they need, at least from our perspective.
| 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 | € 2,30 |
Weak |
| 25/29,5 kg | 27,5/28,5 kg | 22/27 kg | 25/26 kg | € 2.00 |
Soft |
|
|
Dairy cows |
15/24,5 kg |
22,5/23,5 kg |
13/22 kg |
20/21 kg |
€ 1.90 |
Steady |
|
25/29,5 kg |
27,5/28,5 kg |
22/27 kg |
25/26 kg |
€ 1,65 |
Steady | |
|
30/+ kg |
33,5/35,5 kg |
27/+ kg |
29/31 kg |
€ 1,55 |
Steady | |
| Bulls | 25/29,5 kg | 27,5/28,5 kg | 22/ 27 kg | 25/26 kg | € 2,00 |
Weak |
| 30/39,5 kg | 36,0/37,0 kg | 24/34 kg | 31/33 kg | € 1.95 |
Soft |
|
| 40/+ kg | 45,0/48,0 kg | 34/+ kg | 38/40 kg | € 1.85 |
Soft |
|
| Thirds | 15/+ kg | 25,0/27,5 kg | 13/+ kg | 24/26 kg | € 1,35 |
Soft |
| Thirds bulls | 30/+ kg | 38,0/40,0 kg | 24/+ kg | 33/36 kg | € 1.45 |
Soft |
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