Friday, 30.11.2018
Market Report

The US $ in EURO

What happened this week?: November has ended today and the last three regular weeks of 2018 begin with next Monday. As far as hide and skin sellers are concerned one can literally feel how much they are longing for the break around Xmas. Just to get a few days off, with the families and a pretty high guarantee that business will not disturb from whatever direction. This week was once again pretty much a copy of the previous ones. The only exception may be the renewal of several regular programs which traditionally cover December and January to avoid any kind of discussion around Xmas or the first week of the New Year. This year the holidays are fitting well into the working week so that most of the industry and businesses will be closed except the ones which traditionally have to work. More and more tanneries are trying to curtail soakings early this year. Some try already to refrain from soaking in week 51 and not stopping by mid-week only what would allow hides to come out of the drum still before the break and await reopening for further processing. Even tanners with orders in hand run slow and have no hurry to keep production high. In the past years this was different and  at least automotive tanners where using every day they could handle with the labor force or contract tanners. In cooperation with contracts tanners the throughput of chilled hides could be maintained and any kind of salting and storing avoided. This year it hits the hide pipeline hard and hide flow is stuttering. The problem has already begun now, because slaughter is higher than soaks and this means that already now hides begin to pile and decisions how to handle them have to be taken. The options are few. Either you salt or they have to be contract tanned on suppliers risk and stock. Not one of the top choice, because many decisions into the dark have to be made. Wetblue or wetwhite, tanning receipe and splitting substance. It is pretty obvious that for the extra heavy males there will be only one decision and this is auto related tanning what can become a headache if lower kill or better demand are not requiring additional hides on top of the regular kill. Anyway, most hope for the best and a sharp drop in the kill towards carnival what will then allow to filter the present surplus back into the pipeline. Apart from this the trade is discussing how far the price adjustment of the heavy males has to go. Not a surprise that opinions vary and the super optimists believe that the extend can be limited. In the sheer analysis of the global price spreads and the supply and demand balance an adjustment of 25 % could not surprise anyone, but not difficult to understand also that mainly the large producers consider this out of any consideration. Time will tell. At the same time th price for cows has a bottom floor presently as long as the competing origins do not drop to regain market share. What had been done slowly, but still in time - a sufficient correction - to stay competitive in the global competition has been ignore for males, because the key players were completely ignoring the possibility that the EU tanning industry to fail one day to clean up production. Now it has happened and if it is necessary to find new and additional home for the premium extra heavy hides the have to fit into the price grid and leather markets of the potential new buyers. Except additional transport charges and salting cost which reduce revenues also the optional price ranges are totally different. Sales this week were in aggregate at the end not so bad even though the feeling was different. Some cows, some heifers, some males for regular clients added to a number which was actually not so bad considering the present conditions. However, trades are subsidized by price concessions and we do almost everything to hold our quality and regular clientele onboard. Prices were about 2-3 % lower for cows and 5-8 % down on males for December deliveries. Jan prices were not obtainable yet..   The Kill: Weather according to season hold the slaughter levels high. Plenty of cattle around and waiting for slaughter, but beef sales are not sufficient. Means we will still have enough supply for some time of higher kills.  . What do we expect: Eu hides can find always a buyer if they are adequately priced. If the price is right one can actively manage sales. For cows this works just about at the moment. For heifers may be too, but for bulls we are miles away. If this problem is solved with the abattoirs,  sales will regain pace, but if this painful move is further delayed the present paralysis and problem will persist.

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 € 1,60
  25/29,5 kg 27,5/28,5 kg 22/27 kg 25/26 kg € 0,90 Stable

Dairy cows

15/24,5 kg

22,5/23,5 kg

13/22 kg

20/21 kg

€ 0,70


25/29,5 kg

27,5/28,5 kg

22/27 kg

25/26 kg

€ 0,58


30/+      kg

33,5/35,5 kg

27/+   kg

29/31 kg

€ 0,53

Bulls 25/29,5 kg 27,5/28,5 kg 22/ 27 kg 25/26 kg € 1,50
  30/39,5 kg 36,0/37,0 kg 24/34 kg 31/33 kg € 1.50
  40/+     kg 45,0/48,0 kg 34/+   kg 38/40 kg € 1.40
Thirds 15/+      kg 25,0/27,5 kg 13/+   kg 24/26 kg € 0,40
Thirds bulls 30/+      kg 38,0/40,0 kg 24/+   kg 33/36 kg € 0,80

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