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Osterhorn,
Friday, 10.05.2013
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Market Report |
The US $ in EURO
1,3040
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What
happened this week: While
international markets have now
taken their decisions and prices
are correcting is the situation
in Europe still complicated. The
market situation is driven by
the high quality material for
automotive, shoes, leather goods
and even furniture. With the
vast majority of the raw
material for the high end
production also coming from
Europe and the delivery lead
times being so much shorter,
contract being mostly made for
some weeks only, tanners can not
stay out of the market for long
and for suppliers it is pretty
easy. They know when the
contracts end, they know, that
many clients depend on fresh
hides and also the few
alternatives buyers would have
to escape - if any at all. With
the strong performance the high
end market has shown in the past
it was a pretty easy game to
push the market higher and even
now the fundamental shortage
keeps many slaughter houses and
suppliers still on the - not
even the sky is the limit -
track. However, not all European
hides qualify for this game, but
they are mixed into the pool and
dragged into the price war.
Prices at the abattoirs still
rise for almost all hides - even
against the market trend for
those which are not in the focus
of the market trend.
Consequently we have now reached
a junction in the market where
the premium categories
decouple from the rest of the
market and the fundamental
shortage of high quality
material and the strong
performance of the luxury and
automotive market leaves tanners
hardly any option other
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than to
buy before losing the raw
material supply needed. For the
rest of the market more
economical considerations come
into play. The low season in
Asia and upcoming holidays in
Europe are leaving their tracks
in the leather business and in
the order books. Medium and low
grade hides are also in much
better supply and more
alternatives can be found - not
to speak about the options to
substitute leather in
production. If that is not
enough than financial reasons
are coming into play and in the
meantime it hits more and more
people, that payments are not
coming in timely or L/Cs are
opened with a certain delay. As
much as leather is still
favoured as much have the sharp
rises of raw material prices
left their impacts in the supply
chain and as much as traders and
butchers may have taken benefit
from the firm market as little
have tanneries digested the
constant rise of raw material
prices over the past season.
With about 6-8 weeks to go until
we reach the high season of
holidays in Europe the time is
getting closer to understand
more about the trend of the
global economy and the potential
for leather prices in the second
half of the year. That higher
leather prices are needed to
compensate for the present price
levels and to support them for
the rest of the year. We find it
increasingly interesting, that
everyone speaks about the raw
material markets and supply and
there is hardly much heard about
the leather business in general.
Everyone is just focussing on
the automotive premium section
and the luxury leather business.
The standard markets are hardly
mentioned in the
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media nor is
anyone really bothering
about them. It is enough to
believe that the emerging
markets will continue to
grow more as the old
economies suffer. And indeed
it is hard to get a clear
picture about the entire
demand for leather for the
second half of the year.
This week was again
generally quiet which was
mostly owed to a holiday on
Thursday in many countries
in Europe. China is taking a
wait and see position since
the up trend in the USA is
broken and prices are declining.
Traders try still quickly to
liquidate stocks which are
still possibly generating
some profits before they
turn sour and packers try to
stem as much as they can
against the turn in the
market. Sales were again
pretty limited. Mainly for
price reasons. Buyers bid
lower from overseas and in
Europe they don't want to
move to the levels needed to
cover for the recent price
rises at the
abattoirs. so, it was
a bag of mixed emotions and
result and we think it fair
to say that in average
prices did not move much
either side. .
The Kill: The kill was
again reduced by the holiday
on Thursday. Beef
consumption at this time of
the year is always not
brilliant and so is
export. Numbers and
weights are low - as it is
usual in spring and there is
no change in sight. . What
do we expect: It seems it
will still take some time
until a clear direction is
established. In Germany we
face a special situation as
explained above and this
prevents from a clear trend.
For the hides from our
region it will be
difficult. The little
firmer USD is the only
relief we can find. If the
US market doesn't recover
soon it will be extremely
difficult to escape from the
new price relations globally
and we should follow.
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| 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 |
€ 2,40
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Steady
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25/29,5 kg |
27,5/28,5 kg |
22/27 kg |
25/26 kg |
€ 2.20
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Steady
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Dairy
cows
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15/24,5 kg
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22,5/23,5 kg
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13/22 kg
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20/21
kg
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€ 2.30
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Steady
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25/29,5
kg
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27,5/28,5 kg
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22/27 kg
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25/26 kg
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€ 2.00
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Steady
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30/+
kg
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33,5/35,5 kg
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27/+ kg
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29/31 kg
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€ 1.90
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Steady
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| Bulls |
25/29,5 kg |
27,5/28,5 kg |
22/ 27 kg |
25/26 kg |
€ 2.50
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Steady
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30/39,5 kg |
36,0/37,0 kg |
24/34 kg |
31/33 kg |
€ 2.30
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Steady
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40/+
kg |
45,0/48,0 kg |
34/+
kg |
38/40 kg |
€ 2.00
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Steady
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| Thirds |
15/+
kg |
25,0/27,5 kg |
13/+
kg |
24/26 kg |
€ 1.60
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Steady
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| Thirds bulls |
30/+
kg |
38,0/40,0 kg |
24/+
kg |
33/36 kg |
€ 1.60
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Steady
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