The need for fresh hides and the low kill has not permitted any accumulation of salted inventories with the exception of some neighbouring countries. What cannot be absorbed in the extra heavies is—as in previous years—stacked in wet blue by some of the processors with contract tanning or tanning facilities. The expectation is that the surplus is only temporary and the declining kill in spring, in combination with the lower kill, will allow the sale of the merchandise as it did in 2006. In the meantime, many tanning areas in Europe are reporting reduced activity. The optimists consider this to be a seasonal matter, while the pessimists believe that, in Europe at least, it could be the start of a declining demand for leather and/or production. Ultimately, no matter who is right, the fact of the matter is that the European market has been losing a lot of momentum since December. As long as this can be absorbed by the Asian buyers there is no problem but, as in the example of the extra heavies where there is no way that all the hides can find homes at present, one has to accept that the market conditions would be different without the overseas support. This would be less important if there were not a number of suppliers fully focused on the European customer base and, if they can not move product in the volumes to which they have been accustomed for some time, the gap in prices between Europe (fresh) and overseas (salted) could widen quickly. It is certainly too soon to tell at present, but the high priced and extra heavy materials will certainly find the market conditions more difficult in the near future.
