Leather Pipeline: Leather consumption may have dropped by as much as 30%
27/11/2018
It draws on information included in a review that a European company recently compiled in response to a question from Asia about how the hide market is going to perform.
The review begins with a widely accepted assertion: “The fact remains that the demand for leather and hides is underperforming; not all the hides produced globally are covered by the demand for leather.”
It goes on to explain that the decline in leather consumption, particularly in the shoe industry, has come at a time when the production of beef, and consequently of hides, is rising.
The review estimates that overall leather consumption is down by 10-30%. This is supplemented by an adjustment of the production level in China, which has been running at over capacity for some time. It concludes that the “net decline” is therefore 20-40% compared to two years ago.
“The decline is unevenly spread and has different causes,” it says, pointing out that the decline in demand for shoe leather is the result of a change in fashion and material preference. It attributes the drop in upholstery leather production to capacity correction in China, particularly in Hebei province.
The latest Leather Pipeline also reveals that tanners are delaying their regular purchases in the expectation that hide prices will fall further. This means many are running low inventories made up of just the hide qualities they need.
In addition, the report says it is unlikely leather demand will rise for the coming season and may not do so in the coming two seasons.
The full Leather Pipeline report can be accessed here.
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