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Osterhorn,
Friday, 17.01.2020
Market Report

The US $ in EURO
1,1110


What happened this week?: While in Europe the holiday season ended two weeks ago the season begins in China and other parts of Asia. This means that the period of the slowdown in one part of the world is this year quickly followed by the break in another and dominating one. Business and production activity in Europe has pretty much resumed to normal and standard levels which we were used to already in the last quarter of 2019. The first round of discussions with the European customer base does not make us believe that very much has changed in the leather demand in the production season is just running its course. Depending on the sector people are operating in they are now waiting for the next tradeshows to understand what 2020 is going to bring in terms of orders. However, once again everyone has to understand that the calendar year is one thing and the season of leather production a completely different one. For the vast majority the years cut far more in the summer than it is by the end of the calendar year. The winter season is busy while the summer season in general is mostly slow and - despite fast fashion - leather has still the active from September to April and a very slow one between May and September. This means that the trade shows at the beginning of the year can offer certain indications, but not become a serious reflection of the leather demand for the entire calendar year. It was obvious that many players here in Europe had been quite impressed by the positive production and registration results the big premium manufacturers of cars in Europe had published for the months of 2019. These news for Europe and the relatively stable interest and purchase activity from the Hebei region in China seems to trigger more optimism across sellers in Europe. The signing the phase 1 trade agreement between China and the USA might also have had a positive psychological effect. However, even if we are considered to be the party crashers once again we tend to believe it's definitely premature to call for the big change and turnaround of the market drama we have seen now for quite a while. We are in the peak season of leather production and so is not unusual that the tanning industry is looking for an adequate number of hides. If everything would be so outstanding like the optimists love to see it all stocks would already be gone and the interest would be far more widespread. One should also never forget that exactly the clients in China which by now have a pretty solid reputation to disappear as quickly as they have come when things do not turn out the way they were expecting. There are also just two more month of production to cover until the low season is going to effect the demand once again and is every year. Even with the good results of the end of last year for automotive remains also vehicle production for this year pretty vulnerable. A bright spot might be seen from lady shoes where manufacturers from all over the globe are predicting a strong season for ladies leather boots for winter 20/21. Business and sales this week had been relatively quiet. A few late comers from China had been once again in the market for female hides and at the end and long negotiations sales at steady of fractionally higher prices could be concluded. In Europe most players are waiting for the price trends at the slaughterhouse and by how much possible speculation might influence the negotiations for February. This has postponed most of the sales into the weeks to come. The kill: The kill in the region is slowly returning to the normal levels one would expect for this time of the year.  Weights continue to be high end for the coming weeks we have absolutely no indication for any change.    What do we expect: Quiet times from Asia and focus on the trend at the abattoirs what will be the biggest obstacle to handle when nothing else changes presently.


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 € 1,20
Stable
  25/29,5 kg 27,5/28,5 kg 22/27 kg 25/26 kg € 0,70 Stable

Dairy cows

15/24,5 kg

22,5/23,5 kg

13/22 kg

20/21 kg

€ 0,70

Stable
 

25/29,5 kg

27,5/28,5 kg

22/27 kg

25/26 kg

€ 0,60

Stable

30/+      kg

33,5/35,5 kg

27/+   kg

29/31 kg

€ 0,55

Stable
Bulls 25/29,5 kg 27,5/28,5 kg 22/ 27 kg 25/26 kg € 1,15
Pressure
  30/39,5 kg 36,0/37,0 kg 24/34 kg 31/33 kg € 1.15
Stable
  40/+     kg 45,0/48,0 kg 34/+   kg 38/40 kg € 1.05
Stable
Thirds 15/+      kg 25,0/27,5 kg 13/+   kg 24/26 kg € 0,30
Stable
Thirds bulls 30/+      kg 38,0/40,0 kg 24/+   kg 33/36 kg € 0,40
Stable





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