Market Report 27.12.2024

What happened this week

This report will be the last one for 2024. The year is coming to an end and next Friday we will already be writing the year 2025. In the western world, the public holidays were positioned in such a way that most production facilities were completely closed. For the most part, this also applies to next week. So, there was plenty of time to review the year and the situation for the hide, skin and leather market. It was certainly a difficult year for most people. There is no need to mention the general political situation, the wars and conflicts. The leather industry has had its own difficulties and these are only partly related to the conflicts on this planet. Demand and price trends this year speak for themselves. Demand for leather is falling worldwide, the pressure on prices is increasing and this is particularly affecting the locations with the highest production costs. Leather is less than ever a material that is absolutely necessary for many products and can therefore be replaced at any time and in almost all areas. The fervent desire of many brands and automotive manufacturers over the past years to please the western mainstream and at the same time achieve cost advantages has cost leather a great deal of market share. However, this does not change two facts. Firstly, leather has functional properties that still cannot be matched by substitute materials. Not everyone needs them, but many appreciate them when they are explained and they recognise the difference and added value. However, if the aim is still to make these properties disappear through processing, then there is of course little reason to use the original. Furthermore, the total amount of available raw material is not decreasing and therefore the question remains as to what is the most sensible and valuable use for it. Leather remains at the top of the list, but if it is not to become leather, then it will become collagen, gelatine, biomass or simply waste. For the beef producer, it doesn’t really matter. They just have to make sure that they don’t choose a worse route than the competition. For the rest of the chain, however, it does. In any case, the hides do not just and simply disappear into the air, free of Co2. Leather will hardly win the price competition and with laws, regulations and certifications nothing has been gained, but a lot has been lost. If these assumptions are correct, then we must have certain concerns about the near future and possibly Asia has to solve the situation once again. The position of leather is still a different one out there and the power of the consumer market can still make the difference. Well, we haven’t got that far yet and, as we suspected, there were still a few bargain hunters this week who tested whether anyone was still reading their messages. Lo and behold, after a lot of toing and froing there was still something on the net and a little bit of business to Asia could still be concluded. After a tough struggle, almost unchanged prices were achieved for smaller quantities for cows and heifers.