Market Intelligence: stalemate in the raw material arena
Our latest Leatherbiz Market Intelligence report is now live. This edition of our exclusive report on the leather supply chain says that there is something of a stalemate on raw material supply.
“Chinese tanners have pulled out of the raw material markets and reduced their purchasing activity significantly,” it reports. It explains that Asian tanneries, led by the Chinese, had the money, the opportunity and the courage to refill their stocks at good prices at an early stage in the economic recovery from the covid-19 pandemic.
European tanners, somewhat reluctantly, came back to the market later. They work much more closely to a just-in-time model than their Asian counterparts. The level of demand ties in reasonably well with declining cattle slaughter rates in Europe and no pressure is building up on suppliers to adjust prices.
The Market Intelligence report says this adjustment will occur, but possibly not until Asian tanners need to buy again. It says it’s a pity this might not happen until the summer because a correction now would “clear the air”.
Image: Bader
