Market Report 07.06.2024

What happened this week

In times like these, there is relatively little that changes from what we have been experiencing for weeks. The market and activities are slowly but steadily declining in the second quarter and the question is not so much whether but rather when and to what extent the situation will calm down further. The consequences of this are another question. If the leather industry adopts a fundamentally optimistic and positive attitude, then it is accepted with a shrug of the shoulders as a normal seasonal event, but if, as is now the case in many sectors, pessimism and problems are a burden, then the mood will be affected accordingly. Meat producers are trying everything and anything to counter this situation. In the end, there are not too many options, so I either have to decide to forego sales volumes or adjust the desired price levels, i.e. lower them in a situation like now. This makes the situation extremely complicated at the moment, because it no longer results in a normal market dynamic that reflects the real situation, but instead there are many different islands that are not put together by some to form an overall picture, but everyone picks out what they think is the most favourable description of the market situation. Of course, this changes very little in terms of business and sales and does not change the overall situation. Customers in Asia, and for us the tanneries in northern China are the most important, are clearly holding back and documenting their current lower demand with very aggressive price expectations or even by staying away completely. In short, the total number of responses to offers is not only very small, but also barely acceptable. In the end, this means that at least we were unable to get any sales on the books in Asia this week. If we had wanted to, we would have been able to, but perhaps it is better to simply do without at the moment. The bad mood in this region is also clearly documented by the negative comments about the quality of incoming deliveries. Of course, you can always find something that is less surprising, but at the moment it is very clear that this is not really about a serious deterioration in quality, but either to reduce frustration or in the hope of saving a few more dollars. In Europe, the situation is somewhat different, but certainly not much better. The just-in-time deliveries force the tanners to take care of the raw material supply until the summer holidays and have to face the suppliers accordingly. The slaughter industry is trying to use this situation to maintain prices in the short term, but only the time after the summer holidays will show whether this is a particularly successful strategy. At the end of the day, business is never at a standstill this week either, but to be honest we can’t report any major activity or sales.