Friday, 07.02.2020
Market Report

The US $ in EURO

What happened this week?: Everything what was still in question a week or two ago has now completely materialised. The small, little, tiny virus is actually showing us what globalisation really means and what can happen if the smooth flow in the network doesn't work anymore. This time it is a virus, but many should be aware that this could quickly also be a political decision. Populism and nationalism could quickly spread with the same consequences like the virus, with the only difference that it might be much more difficult to control and put such developments under quarantine. For the moment we have to deal with the virus and certainly nobody needs any kind of reporting an explanation from our side and this report. Everyone is most likely following the news and the headlines. How dangerous the virus at the end is going to be nobody actually knows. Outside China the reaction is relatively relaxed and even major trade shows are going to be held. This applies not only to the trade shows for leather, but for many others to that the number of visitors and exhibitors is far bigger and the proportion of Chinese in the crowd is expected to be much larger. Outside China the reaction is far more relaxed, because in general the symptoms are in the big majority of the cases very, very light and so far from what we know the spread of the infection is pretty well under control. However, who knows the full story at this stage. It is now more than two weeks that we really have to deal with the issue. What had been a pretty isolated and regional case is now become an infection of people in business around the globe. It is amazing how long it really takes until the system allows to trickle down the potential consequences on the individual companies and supply chains. For the hide business in Europe it has become a shot in the arm of all the enthusiasts which we had seen since the beginning of January. Quite a number of sellers were convinced that the negative trend for high prices had already been over if not turned around on quite a strong group of players were trying to create a momentum for a rising trend of high prices. It might have been fragile and questionable before this virus, but it has definitely caused a great deal of concern if the ambitions will be successful. The biggest problem are the prices that the abattoirs, because the optimists had send already so many positive signals they don't know how to get out of this again. Actually it is more difficult than ever to predict the hide market trend, because it is a simple lottery to know how the business is going to be affected in the weeks to come. The fact sheet is telling us that sales, production and shipments will not reach the levels planned and expected before mid-January. It tells us also, that a longer break would let the tanneries in the Orient not only interrupt regular shipments, but also possibly let us lose a good part of the remaining active production season. As far as business is concerned the week was reasonably quiet what can't be a surprise. At the beginning of the week there was still a reasonable amount of interest from China in particular again for the premium grades of the female section.We took the bids has been lucky, because they were quickly withdrawn the moment one was not replying by return or even daring to counter the bids. .The Kill: The kill continues to suffer. Beef prices are under pressure again and European consumption is not really allowing the abattoirs to look for production in a negative manner. There's really little to make anyone believe in a change in the short term..   What do we expect: At this stage we think that prices will get under pressure again. The wait-and-see attitude of the tanning industry will continue this means that only the just-in-time and bread-and-butter business in Europe can be considered to be stable. If buying the others will try to take (price) advantage now.

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 € 1,20
  25/29,5 kg 27,5/28,5 kg 22/27 kg 25/26 kg € 0,70 Stable

Dairy cows

15/24,5 kg

22,5/23,5 kg

13/22 kg

20/21 kg

€ 0,70


25/29,5 kg

27,5/28,5 kg

22/27 kg

25/26 kg

€ 0,60


30/+      kg

33,5/35,5 kg

27/+   kg

29/31 kg

€ 0,55

Bulls 25/29,5 kg 27,5/28,5 kg 22/ 27 kg 25/26 kg € 1,15
  30/39,5 kg 36,0/37,0 kg 24/34 kg 31/33 kg € 1.15
  40/+     kg 45,0/48,0 kg 34/+   kg 38/40 kg € 1.05
Thirds 15/+      kg 25,0/27,5 kg 13/+   kg 24/26 kg € 0,30
Thirds bulls 30/+      kg 38,0/40,0 kg 24/+   kg 33/36 kg € 0,40

We are increasingly realizing and have also been notified, that the content of our market report in full or in part is frequently copied and distributed or published without our permission. Apart from the fact, that we are honored by the interest our report consequently receives we would like to draw our readers attention to the fact, that the market report is covered by copyright law. We think, that it is not only bad manners to copy and use it without permission, but one should bear in mind, that copying and distributing without permission is a violation of international law. Please contact us for any questions in this regard to avoid misuse or misinterpretation of the content of the market report.

E-Mail: sturm@frsturm.com © Friedrich Sturm GmbH & Co. KG Web design: SKS online