Market Report 07.12.2024

What happened this week

This week, too, many players were hoping for news from the market, but overall very little is happening. In the European leather industry, and this is hardly surprising, there seems to be an increasing focus on the current difficult situation and the outlook. Even if there are few tangible facts available due to the small number of companies that have to publish their results and decisions, it is possible to recognise from the little data and information that the situation and prospects are or can hardly be positive. Changes at management level, announcements of redundancies and negative business results are obviously just the tip of the iceberg of the whole situation. One cannot and should by no means generalise, but a second look at the realities certainly does no harm. For the hide market in Europe, this also meant very little activity and movement last week. There was only talk of raw material deliveries where production simply had to be supplied. However, most customers report that they could actually take a longer production break without any problems and without this leading to delivery problems due to a lack of stocks of raw or semi-finished products. In the meantime, the focus in Europe is increasingly turning to alternative uses for bovine hides. As mentioned so often, sooner or later all markets rebalance. In Europe, this initially means that there will be a partial and short-term lack of lime splits due to a decline in the production of bovine hides. Now the are just taken and limed for the sole purpose of supplying the collagen industry. This removes goods that are actually destined for the leather industry from the market and thus reduces a certain supply pressure. Whether this will actually be a permanent solution seems rather unlikely and remains to be seen. Reports from China and the responses from customers in some regions there point to a similar scenario. The revenue for the split is much more important today, determines prices much more strongly and often seems to be the actual criterion for buying or not buying raw materials. In any case, buyers from Asia again tried to exert greater pressure on prices this week. The upcoming Christmas break in Europe and the subsequent break in Asia will only lead to the question of whether and to what extent these breaks could be extended. For this week’s sales, we can only report that sales were limited to spot transactions and that these were largely restricted to heavy male hides.