Market Report 06.10.2023

What happened this week

The first week of the last quarter in Asia was marked by the Golden Week in China. In Germany we also had a public holiday on Tuesday, which, together with just an extra holiday offered many a nice and long holiday. Basically, we had expected that customers in China would use the week to stay away from the market and first see how the markets would develop. However, this was only partly true. At least until Tuesday there were still some stragglers in the market who obviously wanted to take the opportunity and test whether the holiday week in Europe might cause anyone to fear that they would no longer be able to sell their hides at market prices. This resulted in quite an acceptable number of enquiries and bids, even though some of them were extremely ambitious and up to US$ 4.00 below the last concluded levels. As the main interest was once again on the female hides, which are no longer under much pressure to sell, the discussions about low prices ended relatively quickly. After it became clear that no business would be possible below the last prices this week, some decided to enter the market and secure further material. Of course, it is a question of whether one was too shy as a seller to demand further increases, but at least in our case, we see sales security as an important criterion at the moment. In any case, it seems that in a comparison of many different world market prices, buyers in China are moving within a very narrow range of prices and at the moment at least the prices are capped. No doubt the next few weeks will show how the usual wrestling match between buyers and sellers will turn out. One thing remains certain, the problem of the leather industry at the moment is in Europe – at least as sellers of the most important by-product of the meat industry we can consider ourselves lucky that once again there is both confidence and demand in China. Although there will certainly be some interested parties in Europe who will celebrate the difficulties of the leather industry in this region, on the other hand they will also have to accept that, as well as in other industries as in the energy sector, standards are no longer being set here and consumers outside Europe are also behaving differently than they might wish here. They might think it is both unnecessary and regrettable, but it cannot be changed and that is why it is probably very advisable to take a close look at further developments in the various regions of the world. The situation, trends and developments are simply too different. Sales this week were once again concentrated on female goods and overseas. Prices remained almost unchanged and were only influenced by the respective daily events on the currency markets.

The kill

Even though the weather continued to be very friendly, the kill is now increasing noticeably. It is explained on the part of the meat industry by a flourishing export business and less by an improvement in national demand. It would be gratifying for the industry in any case if the difficulties with pork continued. Now that the weather is slowly adapting to the season, sales of beef on the domestic markets should also increase again.

What do we expect

The next few weeks will show whether the established trends of stable markets for cows and weaker markets for males and the separation between overseas and Europe will continue. At the moment, in any case, there is much to suggest that it will. It is quite unlikely that some will not try to tempt fate again and play poker for even higher prices in Asia. Certainly not a risk-free venture. The situation for sales in Europe is to be assessed as much more difficult under the given conditions and with the expectation of an increasing kill. Here, the pressure will probably not be relieved in the short term.