e







Osterhorn,
Friday, 13.11.2020
Market Report

The US $ in EURO
1,1820


What happened this week?: We are right in the middle of the peak season of leather production. When if not now are tanners busy and need hides. Basically this is also reflected in the activity since a while. However, also the pattern of activity is pretty much the same as usual. The Asian customers have to start the cycle well in advance of the Europeans and so they generally did beginning from July onwards. That is what we saw also this year and the buyers with the necessary courage at that time to do so have been rewarded by the market trend and the possible margins they were able to achieve in their business. Many times mentioned, but the production activity is not evenly spread. As well as by region as well as by leather types it is a very concentrated trend. Tanners in Asia under the lead of China as well as automotive and upholstery tanners were able to generate a substantial rise in orders and so they are steaming ahead in production.The tanners who missed the boat and the chance to replenish their stocks in time struggle now to follow. We have seen quite a number of interested parties in the past weeks who are desperately looking for hides, but actually at the prices which had been valid four weeks ago. This generates actually  a very well known scenario in the leather business. With rising raw material prices tanners have to ask for more money for the leather and consequently are buyers now trying to shop around and knock on every door to see if some cheap leather can still be found. The traditional habit in particular in China. The tanners who had not the privileged to be honoured by orders in the first round are now trying desperately to hop on the bandwagon, what they can only do if they still find adequate priced raw material. The others who are in the game from the very beginning can operate from a reasonable cost averaging calculation and they do not need  o far to enter another big round of new raw material buy. In particular considering that the holiday periods are ahead of us and actually nobody knows what the pandemic is still going to cause and how the business is going to continue into 2021. So, these people buy hand to mouth and have become a very tough partner to negotiate prices. Consequence: Volumes of sales falling and prices begin to face rising resistance.The above applies to upholstery where the low prices have obviously triggered additional demand and automotive where the recovery of production not only bolstered volumes, but created also healthy margins to compensate for some of the problems of the lockdown in the second quarter. In the side leather market things are definitely still lagging behind and hopefully also here the trigger is close. So far a real boost for the demand of shoe and leathergoods is missing and hopefully the Seasons will help. Business this week was in volume reasonable. Regular buyers cover, but the price talks are tough and with the  abattoirs always steaming ahead it is barely possible to compensate. If one takes what the buyers want volumes could be placed if you insist on what you need the volumes are substantially decreasing. Prices for dairy cows went a fraction up, but it takes days to gain 50 cents while the market for light males continues to be very tough. The Kill: The numbers change from day to day and from plant to plant depending on cutting capacity. However, in general and average we are within the seasonal averages.   What do we expect: It seems the market is now looking for a break. We expect that the next move will also be triggered by the local sales in China (11.11.) and inventory clearance  while in Europe the consequences and decisions in relation with the pandemic will play the decisive role. We can not find much what can rock the market for the moment either way.


Type Weight range Avg. green weight Salted weight Avg. weight salted Price per kg green weight
Trend
Ox/heifers 15/24,5 kg 22,0/23,5 kg 13/22 kg 20/21 kg € 1,00

Steady
  25/29,5 kg 27,5/28,5 kg 22/27 kg 25/26 kg € 0,70
Steady

Dairy cows

15/24,5 kg

22,5/23,5 kg

13/22 kg

20/21 kg

€ 0.75


Steady
 

25/29,5 kg

27,5/28,5 kg

22/27 kg

25/26 kg

€ 0.60


Steady

30/+      kg

33,5/35,5 kg

27/+   kg

29/31 kg

€ 0.50


Steady
Bulls 25/29,5 kg 27,5/28,5 kg 22/ 27 kg 25/26 kg € 0,70
Steady
  30/39,5 kg 36,0/37,0 kg 24/34 kg 31/33 kg € 0,95
Steady
  40/+     kg 45,0/48,0 kg 34/+   kg 38/40 kg € 0,85
Steady
Thirds 15/+      kg 25,0/27,5 kg 13/+   kg 24/26 kg € 0.35
Steady
Thirds bulls 30/+      kg 38,0/40,0 kg 24/+   kg 33/36 kg € 0.40
Steady





We are increasingly realizing and have also been notified, that the content of our market report in full or in part is frequently copied and distributed or published without our permission. Apart from the fact, that we are honored by the interest our report consequently receives we would like to draw our readers attention to the fact, that the market report is covered by copyright law. We think, that it is not only bad manners to copy and use it without permission, but one should bear in mind, that copying and distributing without permission is a violation of international law. Please contact us for any questions in this regard to avoid misuse or misinterpretation of the content of the market report.






E-Mail: sturm@frsturm.com © Friedrich Sturm GmbH & Co. KG Web design: SKS online