Market Report 09.05.2025

What happened this week

Even though the fundamental situation has not changed, there have been a few things that have caused a stir. Firstly, of course, the major fire at ECCO Leather in Holland, which completely destroyed one of the largest leather factories North of the Alps. Then there was the news that the Vitelco leather factory, also in Holland, will be closing its doors voluntarily in the near future. It was not really expected that the production capacities in Europe would reduce in this way. Of course, this has no direct impact on the hide market, as the leather industry currently has sufficient capacity to absorb additional quantities for production, if required. As there is still no sign of any easing in the dispute over tariffs between the USA and China, the pressure to find alternative markets for raw hides from the USA is constantly increasing. Of course, this particularly affects cowhides, but other types are also affected. The effect is becoming more and more pronounced and all raw materials that can be replaced by American hides have to face this pressure. Awareness is also slowly growing that international logistics will also be massively affected by the trade conflict. There are still many different opinions about the effects, but it is difficult to expect any positive effects. There is some relief worldwide at the moment due to the fall in the kill almost everywhere. The problem would of course be much greater with normal production. For us, the market remained completely paralysed last week. Somehow you can’t help but get the impression that all producers and tanners are currently trying to withdraw from the market as much as they can. The reduced kill gives the suppliers some breathing space and therefore the great pressure to agree on new deals and prices has not really built up yet. However, everything stands and falls with the prices that will soon have to be agreed with the slaughterhouses for the coming weeks. Anything is possible in our business and sometimes many come up with the greatest ideas. However, in view of the current situation, it would be grossly negligent at the moment not to take account of the huge numbers of available hides from the USA and still the hope that the spook will soon be over. Of course, it is conceivable that China and the US will reach some kind of agreement during their negotiations in Switzerland over the course of the weekend, but this will not fundamentally solve the market problem for the coming weeks and months. It should not be forgotten that even before 2 April, demand for leather was not sufficient to fully absorb the supply of hides. Relatively little has changed in terms of price this week. Lower grades and favourable female hides continue to be covered by collagen production options. For male and heavy hides, the pressure is starting to build up further, even if the low kill is still giving suppliers some time at the moment. However, this does not change the parameters of the market. The next two weeks will show the results and how in particular the big players deal with the situation.