US Perspective—28.02.17
28/02/2017
www.themaxfieldreport.com
Last week got off to an exciting start as sources reported that sellers enjoyed a decent number of bids coming in from several countries. The challenge for sellers is that the majority of bids were lower than asking prices, forcing sellers to counter bids, which they did at full asking prices.
Sources report that the full-priced counters were not received well by perspective buyers and a large number of buyers withdrew their bids, while the limited number of buyers who were in need of hides, begrudgingly agreed to full-priced counters, while only agreeing to buy minimal quantities.
Trading levels last week were steady to $1-$2 higher, depending on the selections. The sentiment among producers is that they met much more resistance last week than they were anticipating and sellers likely failed to sell a week’s worth of production.
In the meantime, inexpensive offers of wet blue continued last week, as it appears some of the larger producers continue to struggle with unsold production. According to sources, offers last week on some selections of wet blue were barely $6-$7 higher than prices obtained for wet-salted product, while reports continue to swirl accusing many producers of having product for sale for prompt shipment and in volume.
Reports from overseas claim tanners in Korea appear as if they are struggling. Sources, claim even automotive tanners who had been enjoying decent business last year, insist their requirements for the first half of 2017 are not as large. In the meantime, sources reporting that a couple of the large luxury brands have reduced their orders the first half of 2017 with sources claiming this business was redirected to Italy due to the weaker euro and a stronger Korean won and tanners’ refusal to succumb to requests to reduce leather prices.
Reports from the cowhide trade claim offers last week were limited, as the majority of producers were laying claims to possessing strong sold-forward positions. The few offers seen last week had sellers looking to improve upon their last traded levels, which were met with a considerable amount of resistance from buyers.
The APLF exhibition in Hong Kong is exactly four weeks away and, from a historical standpoint, we usually see prices hold steady or increase slightly leading up to the fair. However, considering that we have already seen an appreciable increase in hide prices in the first couple of months of 2017, this year could be similar to 2015 when, instead of seeing prices rise from February to the end of March, we saw a slight decline in prices.
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