Market Report 13.09.2024

What happened this week

September is traditionally a period of transition. And that’s also the impression it gives this year. For whatever reason, people always return from the summer break with high, if not too high, expectations of how the leather business will develop. However, these expectations, especially on the positive side, can only be met in the very positive phases of production and consumption. In all other years, the motto is patience and wait and see. As the trade fair in Shanghai was also unable to provide any particularly positive impetus, all eyes and expectations are now focussed on the trade fair in Milan next week. This will certainly have a much greater impact and significance for the development of the leather business in the coming months than the trade fair in Shanghai. However, in such difficult times as these, it has a considerable disadvantage. It thrives on the fundamental willingness of consumers to take an interest in consumer goods and, in our case, in particularly beautiful consumer goods. But this year, consumer sentiment is relatively weak almost everywhere in the world and consumer behaviour has changed significantly in many respects over the last twelve months. Unfortunately, most of these changes have had a negative impact on leather production. There is therefore an urgent need for a new stimulus that will positively influence consumer demand in general and material leather in particular. At the moment, it is frankly very difficult to develop hopes for this. Nevertheless, both the articles that we will see next week and the general sentiment will give us clear indications of developments in the coming months. The only question that remains is how the interpretations are made and perceived. In the current situation, it is hardly advisable to take a reflexive, wishful view. We can look at the general sentiment because there was almost no activity on the hide markets this week – at least in our country. There were no major follow-ups from Asia, nor were any expected, and in Europe people are waiting for the results and talks in Milan and presumably also for the weeks afterwards. As a result, the market remains in a state of paralysis. Sellers are doing everything they can to avoid having to give in to market pressure and buyers are grudgingly accepting the fact that their sometimes extreme requests for price reductions cannot yet be realised. In this context, we can only repeat that major price changes would probably have no influence whatsoever on the volume of transactions during this period. As a result, we had just to deal with individual and random transactions this week and wait for the next major deals to be concluded with regular customers in Europe.