Market Report, October 18, 2002, Osterhorn
Courtesy of Friedrich Sturm GmbH & Co. KG
What happened this week: Sales were again reasonable, despite the general difficulty in the market. One has to admit, that in under market conditions like the present one we mostly have a ‘pre’ with the steady and loyal customer base we enjoy. Most of the sales were effected in Europe and we still find the Asian interest pretty slow. Having said this, we, however appreciate the fast income of L/C’s for existing contracts and the request for very quick shipments. This must be directly related to the shipping delays and potential problems arising from the dock strike in the USA. This is even more admirable considering, that quite a few of the contracts are above present market levels. This confirms also, that the demand for hide continues and tanners are not lacking orders or production requirements as otherwise they would just sit back and wait. The business and sales in Europe continue to be burdened by a) the remaining margin problems and b) the rapidly falling market in the UK and in particular in Ireland. As usual at this time of the year sellers take what they get and just try to get rid of the seasonal productions. For those tanners following these markets and having a use for the type of the product bargain hunting time has begun. The annual question is now asked: How long will buyers be able to benefit from the situation and how much can they cover of their needs. In any case this traditional game is weighing on the rest of the market and will maintain the pressure on the other origins. In many parts of continental Europe one gets the impression, that for the first time for many months unsold hides are looking for buyers. We do not assume, that the imbalance is significant and worrying, but at least it is undermining a bit the sellers confidence that the market is sorted out forever and one can be sure, that sooner or later buyers have to accept their proposals. Consequently there is fair chance, that tanners can still continue to keep control of the market and have a chance to widen widen their margins. It has to be said, that this applies only for those who enjoy enough orders as steady business. Finally we are worried by increasing payment delays, confirming our long stated worries about the financial situation of a number of European tanners.
