Market Report 20.09.2024

What happened this week

This week, all eyes were on the Lineapelle trade fair in Milan. Just two weeks after the trade fair in Shanghai, the next opportunity to get an overview of the situation in the leather industry before there is another long break until the next trade fair. The trade fairs in Milan and Shanghai could hardly be more different. In Shanghai, the global, standardised mass market, the local market in China and the focus on the middle and lower price segments. In Milan, diversity, fashion, quality and speciality with a focus on the middle, upper and highest price segments. Even if there have always been difficult phases in these areas in the past, the creativity, confidence, commitment and optimism of the leather industry have always been evident at Lineapelle. As bad as the mood may have been, the qualitative and fashionable spectacle always provided confidence. This time, however, it is possible to come away from the fair with less enthusiasm. Too many worries and, above all, much less confidence among a large proportion of the exhibitors than one is usually used to from the unconditional optimists in the industry. Of course, this time there were also niche manufacturers who continued to speak of positive results. However, the vast majority are simply suffering from a lack of orders and, above all, from news from their customers that would promise a rapid and sustained improvement in the order situation. This means that the structural problem that leather has not yet made a breakthrough as a material in the minds of manufacturers and consumers remains a determining factor. We therefore assume that the majority of visitors will return from Italy with rather subdued impressions. The logical consequence of this is that we did not take away the impression that there were any major and successful transactions with raw materials at the trade fair. At least that is what we can and must say for ourselves. We still have to do everything we can to keep regular customers and be available as a supplier for basic requirements. The price is rather secondary at the moment, which can also be seen from the fact that prices are still not moving significantly despite the difficult situation. The question that arises, however, is whether all available hides will actually find a buyer, or whether the surplus hides may already be used for other purposes, thus preventing further price pressure. For us, the trade fair was once again the event for our niche products and the smaller, very specialised customers with their special items and small series. As already mentioned, prices were little changed and if they were, they tended to be further small markdowns.