Market Report 20.12.2024

What happened this week

Even though there is still just over a week left for 2024, it actually ends today due to the position of the public holidays. This certainly applies to Europe. Overseas, of course, one or two people can still try to find an interesting and favourable buying opportunity or even a ‘Christmas present’ next week. However, there probably won’t be many suppliers available for discussions. The year has been exciting and challenging enough and probably almost everyone will take a well-deserved break. Market activity flared up again this week. In Europe, business is currently most strongly influenced by the multifaceted movements surrounding the production of collagen. Significant quantities are currently ‘disappearing’ from the market in this direction. This has the positive effect that no special requirements are placed on this product in terms of sorting, trim or quality. This makes sales in this sector very attractive in view of the current alternatives. However, the question of the sustainability of this marketing channel remains unclear, as alternative raw materials from overseas are also entering the market and, moreover, the current price level for cattle hides cannot be justified in all applications. This means that for the first quarter, there are still some unanswered questions as to what quantities and at what prices can flow into these markets in the coming months. However, the idea of some tanners that hide prices must continue to fall cannot be realised. It remains the case that there are product groups that are protected by the alternative options, while there are others that still have to justify their current prices for use in leather production. This current market situation now also appears to be having an impact on overseas buyers. A clear explanation of the price and cost situation here is beginning to have an effect and those who want European hides for whatever reason are realising that there is now a price floor that will no longer be undercut because they no longer have to. This may be different again in a few weeks, but at the moment buyers have to come to terms with the given conditions and can only decide whether to buy or not. This will not trigger a ‘wave of buying’ from China and the dream of a market turnaround should be treated with caution, but those in Asia who are interested in European hides have realised in recent weeks that their constant pressure on prices is no longer producing so many casualties among suppliers and this has meant that, on the one hand, slightly more sales have been possible and, on the other, significant discounts have not had to be accepted. Under these conditions, some sales of cows and heifers to Asia were possible and the strengthening of the USD helped somewhat. In Europe, buyers had already closed their books.