Market Report 19.07.2024

What happened this week

Onwards and upwards into the holiday season. In the next two weeks, the last of us will probably go on our well-deserved summer holidays. Even more so than in previous years, a break seems to be really necessary at the moment. On the one hand, to recharge the batteries for the upcoming challenges and, on the other, perhaps to think about how to proceed with leather demand and production in the near future without the daily routines. There is no doubt that new ideas are needed and that we must say goodbye to the leisurely routine of the past, in which there was only a continuous up and down. In many regions of the world, the leather industry is facing a turning point. It is never the final end, just a simple ‚business as usual‘ and hoping for an automatic improvement in the situation hardly seems to be a viable and successful strategy at the moment. Otherwise, this week was once again characterised by the title ‚and every day the groundhog greets the groundhog‘. There is less talk about business at the moment than about the daily news and rumours surrounding the situation on the leather market. Only a few of these are really positive. Mostly it’s about how much stock is waiting for customers, how much capacity may be further reduced and, of course, the question of whether the leather industry will look the same after the summer holidays as it does today. A lot is already centred around the question of whether the trade fairs in Shanghai and then later in September in Milan can really be the trigger for a quick and strong turnaround. There is little to suggest this at the moment. The overall geopolitical situation and, of course, the economic situation in some countries speak against a quick and positive turnaround in consumer behaviour. Leather in particular and the products that are made from it require a positive and optimistic mood. At least until the elections in the USA, there is certainly no clear basis. First of all, further developments on the interest rate markets will probably also play a role. The state of consumer sentiment has also been reflected in many company results from the fashion industry this week. The latest news about large stocks of wetblue hides waiting for customers in Northern China is not helping to brighten the mood either. The business and sales of hides this week were again rather negligible. The monthly negotiations with slaughterhouses and regular customers are due again shortly and then probably very little, if anything at all, will happen before the trade fair in Shanghai.