Market Report 18.10.2024

What happened this week

We find it even more difficult than usual to report anything substantially interesting about market developments at the moment. Normally, October is always a month full of activity, major deals, intensive discussions about the further course of production until spring and, last but not least, rumours and speculation about future market developments. This is usually accompanied by a generally very positive mood for the coming months. People are thinking about how to bridge the interruptions over the Christmas period in Europe followed by the interruptions in China due to the New Year celebrations. There is really very little sign of this at the moment. The quick burst of optimism in China following the government’s support measures evaporated almost too quickly. This does not mean that it has to remain ineffective, but the major trend reversal with a change in sentiment really cannot be presented convincingly. Maybe it’s different for our colleagues, but basically we have the impression that the market is just dragging along. There are no major price changes and even minimal shifts are reported as an event. In the past, we wouldn’t even have said a word about the very limited price changes of the last few months. In principle, of course, there is little room for downward change for many hides. The total costs from the slaughterhouse to the tannery must be covered in some way. Otherwise, for many hides, marketing will ultimately become disposal. In Europe, this currently only applies to the female product and low grades, but sometimes everything starts somewhere. In short, this week’s business was again characterised by only the most necessary purchases, by what the leather industry needs. It is true, however, that the leather industry buys very selectively and with the very narrow price margins that can be seen in the cheaper standard options at the moment, it is naturally trying to secure as many better hides as possible with small price mark-ups. This undoubtedly favours European hides at the current price level. In Asia in particular, tanners are calculating with average raw material price levels. The next few weeks will show whether the purchased quantity and average price will be maintained or whether attempts will be made to secure more hides as possible at the current low prices. The next step would then be to ask whether there is already so much optimism regarding the demand for leather that one would even be prepared to pay increases to secure the supply of raw materials. However, it can be said with great certainty that at the moment there is still enough raw material around and, above all, semi-finished goods still waiting for leather orders.