Market Report 11.04.2025

What happened this week

Anyone in need of fast and exciting entertainment without a thought for the consequences was extremely well served this week. It may not be for civil servants and government employees, but for anyone else involved in any form of international economic activity, the week probably brought more excitement than one would normally wish for. The tariffs came as announced and left just as quickly, with the exception of China. Initially, of course, this only applies to the additional tariffs, as the basic tariff remained untouched. The consequences of this are extremely complex, which is probably the reason why the American president was able to let things get as far as they have. The world is a bit more complex than a pistol duel on a dusty main street in a US western. Well then, we have to live with it as it is and because it’s so complex, it takes a little longer to come to a conclusion, especially as we still don’t know which metaphysical inputs will influence decisions in the near future. First of all, however, it has paralysed the hide market as far as overseas markets are concerned. In China in particular, the dispute over tariffs has now been reduced almost bilaterally to China and the USA, but the consequences will ultimately affect the entire global market structure for the leather supply chain. Within the week, everyone interpreted the situation in the way that suited them best. Until the tariffs were withdrawn, fear prevailed in Europe and then there were those who believed that the frozen business between the USA and China could stimulate demand for hides in Europe. For the majority of raw materials, it is hard to agree with this view, because with or without tariffs, American hides will still have to find a market, and with around a third going to China, this means that prices will either have to be adjusted for the tariff or alternative markets will have to be sought that promise better returns. It is undisputed that, if this happens, it will put pressure on world market prices for similar hide types. At the moment, however, it must be assumed that all other alternatives, such as bypass routes, will also be scrutinised. However, one thing must not be overlooked in the whole discussion. Basically, the price will continue to be determined by the total demand for leather and the supply of cattle hides, and the situation has by no means improved, as both companies and consumers are currently very unsettled by the trade disputes. It will probably take a few more weeks before this is reflected in the valuation of hides and a stable basis is found again. For the time being, prices in Europe have not yet changed fundamentally. There has even been some demand from overseas for individual specialities. However, the further weakening of the US dollar is also having a corresponding effect here. It can therefore be said for this week’s business that the volume was manageable and that prices fluctuated between stable and somewhat weaker. However, we do not believe that this is really indicative of the realities of the future, as there is simply not enough reliable information about the end or further development of the trade disputes.