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Osterhorn,
Friday, 24.07.2020
Market Report

The US $ in EURO
1,1620


What happened this week?: We are now beginning in Europe the peak holiday season. The situation is a bit mixed. While several operations are closing for the normal period of three weeks one can also find a good number extending the break while another number is only closing for a shorter period of time such as two weeks and keeping drums rolling despite reduced daily soakings. That makes a clear analysis of the situation difficult and demonstrates once again that the situation is not as uniform negative as many try to make it. With little clear information offered from the individual tanners it remains a guess what the real situation is. With some it is obvious that their order situation is not as bad as it has become common practice to publish, some may just operate on the (justified) hope for an intensifying rebound of demand and manufacturing in the last quarter of 2020 and further improvement in 2021, while for some the situation is really bad and the Corvid-19 disruptions are just the final lap. So, everyone can pick what suits or where one believes to belong. Slowly the industry starts to realize that it will too long to wait for a Corvid-19 solution. Neither it will just disappear nor a vaccination will reach everyone within an acceptable time for manufacturing and retail. So, decisions will have to be taken before and life has to be organized in between. For the leather industry a lot, but not all is bad. While formal shoes and general fashion might suffer, because there will be less events to use and less occasions to show what you have got there remains still a good chance for some other options and directions where leather COULD be used. If individual transport is favoured vs. public transport the story of the passenger car could enter a new era. Despite massive traffic jams people feel safer in their own car than in crowded busses and trains (see China now). If you dont go out so much anymore, your sofa is becoming a new value including comfort and sustainability and in some parts of the world outdoor activities such as trekking, hiking or just simple walking close to your home might see also rising popularity what is a chance for shoes and boots which offer comfort and last. Consequently it is like always. There are always more than just one option and either you complain about the risk or you check for the chances. Doing nothing what is an adequate third option sometime too, seems not to be one for this situation now. With the holidays here being now a welcomed excuse are the tanners in China somewhat more active and one has to have the impression that the upholstery tanning clusters in the North are either receiving already fresh orders for the winter or they expect them. Activity from the upholstery tanners in China has increased for weeks now and this is also reported from other  origins. They remain still extremely price sensitive and the steep fall of the USD is not making it any easier for us. However, the number of bids through various channels was not bad this week. Some weeks ago all could be taken, but with the present exchange rate several had to be countered what was then refused by the buyers. Anyway, an acceptable number of sales for cows was achieved and it is interesting that one thing has changed. While weeks ago the interest for for quality grades it is now back to commodity and price. In Europe activity was once again very slow and tanners still dont see the present price levels as a chance  and continue to believe that generally inventory is a higher risk than low valued purchases for the future to come. At the end remains the market within the stable and very narrow price ranges we see now already for a long time.  The Kill: The kill drops what is not surprising. Also the Southern part of the country is now preparing for the holidays and supermarkets run their stocks lower. The coming three to four weeks will see the bottom of the year.  What do we expect: The market had been stable for a long time and also EUR/USD traded in a narrow band. Now the currency becomes a factor and should limit any major optimism for the price trends. With just the overseas market open the currency should actually put new pressure on the € market


Type Weight range Avg. green weight Salted weight Avg. weight salted Price per kg green weight Trend
Ox/heifers 15/24,5 kg 22,0/23,5 kg 13/22 kg 20/21 kg € 1,00
Steady
  25/29,5 kg 27,5/28,5 kg 22/27 kg 25/26 kg € 0,55 Steady

Dairy cows

15/24,5 kg

22,5/23,5 kg

13/22 kg

20/21 kg

€ 0.50

Pressure
 

25/29,5 kg

27,5/28,5 kg

22/27 kg

25/26 kg

€ 0.45

Pressure

30/+      kg

33,5/35,5 kg

27/+   kg

29/31 kg

€ 0.40

Pressure
Bulls 25/29,5 kg 27,5/28,5 kg 22/ 27 kg 25/26 kg € 0,65 Pressure
  30/39,5 kg 36,0/37,0 kg 24/34 kg 31/33 kg € 0,70 Steady
  40/+     kg 45,0/48,0 kg 34/+   kg 38/40 kg € 0,60 Steady
Thirds 15/+      kg 25,0/27,5 kg 13/+   kg 24/26 kg € 0.25 Steady
Thirds bulls 30/+      kg 38,0/40,0 kg 24/+   kg 33/36 kg € 0.35 Steady





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