Market Report 23.05.2025

What happened this week

The market is still trying to form an opinion on how things should ultimately proceed. The spread of prices between different origins is increasing and it always takes a while for the effects to become apparent everywhere due f.e. the delivery times. This is quickest in Asia, where all hide prices are constantly compared and demand quickly turns to the cheapest product. In Europe, the reactions always take a little longer because there are initially more hide types that cannot be replaced immediately and there is also the large proportion of supply chains based on fresh, chilled goods. This creates significantly greater dependencies on both sides. Replacing EU hides with material from overseas therefore requires significantly longer lead times and the usability of the split in the collagen industry also plays a major role. This means that demand is nowhere near as flexible as in other regions of the world. However, the belief of some that these circumstances change the facts is somewhat naive. Demand for leather is widely lacking, we are approaching the three summer months and sooner or later the price pressure for most finished leather in Europe will become apparent. The slaughterhouses in Europe are trying to buy time month by month and are postponing the necessary price adjustments accordingly, and in the end everyone is still going along with this, even though it is pretty clear how it will end. The lower kill ease the threats and buys time. However, foresight has never been a core competence in our sector. On the overseas markets, however, things are different. There, the struggle to find a stable price level and market equilibrium is very tough at the moment. Customers in Asia are taking the price basis that was used during the high tariffs between China and the USA as a basis and sellers are trying to restore the status quo before the tariffs. Mr Trump then shocked the markets once again today by threatening tariffs of 50% on imports from the EU. As unpleasant, serious and dangerous as the announcement may be, the President of the USA is slowly losing final respect and confidence in his economic competence. Nonetheless, these announcements are having the effect of further fuelling general uncertainty in all markets. Market activity this week was again relatively modest. The good news is that buyers in China are at least enquiring about prices and offers, but however serious it may be, direct deliveries to China are still not possible from Germany. and the weak USD doesn’t help either. The asking prices, however, were also not conducive to serious bidding. The enquiries still give the impression that people simply want to know how urgently the suppliers need to sell. The little that could be placed this week achieved unchanged prices or slight discounts.