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Osterhorn,
Friday, 29.05.2020
Market Report

The US $ in EURO
1,1110


What happened this week?: With a few exceptions the easing process continues in most parts of the world. The Ramadan period is also passed, the holiday destinations work on their re-opening and get ready to welcome travellers still in the summer season. All depends that we dont face a second wave what seems presently reasonably unlikely with all the precautions taken and still in place for the coming months. We still face some outbreaks and clusters, but the spread can be quickly controlled and an uncontrolled return of the pandemic is not really an option. Governments continue to pump almost endless amounts of money into the economy, but if this will finally reach the consumer and make him spent remains still very uncertain. If the liquidity is really used fo investment and consumption is far from being the only option. Looking at the stock markets one could tend to believe that the money takes the straight road back into the financial markets rather than to support investment and consumption. For the sake of good rising stock markets are at least positive for the general mood. Hopefully the stock markets will be a good indicator and give the direction for the second half of the year. For the moment data and statistics dont help much. Almost all directions which use leather had a bad time since since February. Retail with shoes, garment, upholstery and luxury accessories, automotive and aircraft were all hit and suffer now either from the congestion and the summer ahead or from the caution of spending in uncertain times. If this would not be enough politics are also not helping either. The Chinese government has not only used the Corvid-19 pandemic to tighten control of their locals, but with the fragile growth and economical situation they can also not allow further unrest in Hongkong. So, the recent decisions in Beijing are threatening the freedom and the two systems policy for Hongkong. All this intensifies again the global tensions and threatens the achievements of globalisation. Business this week was slow. In Europe tanners still wait desperately for new leather orders respectively calls for the existing ones. In China one can feel how much business people watch the assembly of the Communist party and the decisions taken. Domestic business and consumption may have recovered, but without sufficient export the Chinese economy cannot thrive and return to growth needed what is the threat for the domestic stability as well. In the other big consumer markets we are entering the summer season which is traditionally not the strong consumption period. This means that the clock ticks for everyone in the leather pipeline. It is fair to assume that the economists are right that we will see a strong recovery after the summer and 2021, but this might be too late for many. Sales activity was once again limited this week, There was a lot of interest from China, but the WeChat groups had decided to test the market again and the uniform and synchronized bidding strategy was once again down by USD 3-4,00 on the levels of mid May. This was not taken and so it was an almost lost week in the Orient. Also the weak USD was no help. In Europe the short term purchasing and hand-to-mouth purchasing continued and so bits and pieces at steady levels were accomplished over here, but nothing really convincing for the coming weeks which in many countries again shortened by holidays. The period until mid July is then last chance for regular business and sales before the summer break.  The Kill: With the Corvid-19 outbreak in the slaughterhouses under control the overall kill begins to resume. Opening restaurants improve the demand for beef as well. Weights decline. The next weeks will be curtailed by holidays.   What do we expect: It is hard to find any good reason for a short term trigger. The general conditions begin to improve without any doubt, but the time is bad just before the summer season. Politics are also becoming now increasingly a market factor. It might still take a few weeks until we will really be able to gather sufficient information for a real judgement.


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

  25/29,5 kg 27,5/28,5 kg 22/27 kg 25/26 kg € 0,60

Dairy cows

15/24,5 kg

22,5/23,5 kg

13/22 kg

20/21 kg

€ 0.50


 

25/29,5 kg

27,5/28,5 kg

22/27 kg

25/26 kg

€ 0.45



30/+      kg

33,5/35,5 kg

27/+   kg

29/31 kg

€ 0.40


Bulls 25/29,5 kg 27,5/28,5 kg 22/ 27 kg 25/26 kg € 0,70
  30/39,5 kg 36,0/37,0 kg 24/34 kg 31/33 kg € 0,75
  40/+     kg 45,0/48,0 kg 34/+   kg 38/40 kg € 0,65
Thirds 15/+      kg 25,0/27,5 kg 13/+   kg 24/26 kg € 0.25
Thirds bulls 30/+      kg 38,0/40,0 kg 24/+   kg 33/36 kg € 0.25





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