Market Report 05.07.2024

What happened this week

The market situation has changed little over the course of this week. In Europe, we are now waiting for the next price negotiations at the abattoirs and the extent to which they will adjust to the realities of prices on the world markets. This is already taking place in other European countries and it remains to be seen whether the necessary corrections will also take place here over the summer and with unnecessary delays. There is still relatively little happening in terms of business. In Europe, we are now slowly approaching the negotiations, which will cover the remaining deliveries up to the company holidays on the one hand and, in some cases, the first deliveries after the tannery holidays on the other. These discussions will of course also include the question of whether and how to deal with the quantities that are actually produced for the regular buyers during their closures. Usually, some of these go to contract tanneries, but it remains to be seen to what extent customers are willing and able to divert the goods this year. Whoever you talk to, there is hardly anyone who describes the situation in Italy as good or even satisfactory. The standard and core customers are taking their goods, but everyone else is reporting almost dead silence in this tanning centre of Europe. At the same time, this means that a large proportion of these hides used there will have to find other markets, leaving only Asia, led by China and also India, with a certain volume. That was also the case this week. However, our position there is somewhat difficult because there are now other origins that are already selling at a lower price level. This makes negotiations very difficult, as there are considerable gaps between the prices that we should actually achieve and the prices that customers in China expect. Given the large difference, it is obvious that neither side can actually realise their ideas. This meant that the negotiations dragged on for the whole week in some cases and all the friendship of both sides had to be invested in order to achieve any kind of result. The weakening USD was no help either. In the end, nobody was really happy. In many cases, however, it was clear that no agreement could be reached and so the talks were simply postponed because both sides were ultimately convinced that the future would bring a rapprochement to their position. The big question still remains as to whether the additional slaughter volumes in Europe in the first six months of this year have found their way at all and to where, because they were certainly not processed into leather in Europe. The markets in the Middle and Far East were probably the main buyers who took pity on the European goods. Tonight we enter the decisive weeks of EURO 24 and so far we have already seen some great matches and a big party of fans. Even though many have already had to go home, the atmosphere has always been friendly and cheerful. Let’s keep it that way, fair games and good luck to all teams and a little bit more for us tonight….!