German Perspective - 26.04.11
What happened this week: Our market finds it extremely difficult to sort itself out. Although it is pretty clear that hides are overvalued there is massive resistance to accept the obvious and sort things out. The prices for bulls should be lower, but with the specific situation in Europe depending on fresh hide supplies and the dominance of the automotive tanners, in this particular market different market rules apply. From the valuation of the material and the leather prices paid the level for this specific raw material should be about 10% lower, but supply and demand doesn’t create the necessary conditions to allow the market to react the way it should. Tanners’ order books are still well filled, auto sales don’t show any short term decline, i.e. tanners are not in the position or forced to cut soaks in the season when the heavy, male material is not killed in any adequate numbers.
