Market Report 16.05.2025

What happened this week

The lively trading with great daily momentum that we have known in the past has not existed for some time now. Too many things are happening that are currently hampering an active commodities business. Of course, many will cite the conflicts in trade policy as a reason, and of course the other geopolitical tensions also play a role, but basically it remains the case that it is actually a problem of the leather industry alone and that the other influences are simply playing an additional role to pronounce. The demand for leather is simply not high enough to make it necessary to really deal with supply and demand. It would be difficult to find a leather manufacturer today who is really worried about their supply of raw materials. Of course, this is also reflected in pricing. Stockpiling, expectations of rising prices or shortages, which normally influence pricing and the behaviour of buyers and sellers, hardly have any influence today. The only thing that really matters for many Asian buyers is how far prices can be pushed lower. In many cases, the bottom limits have been reached in many cases and at the same time hides are being diverted to other uses. To a certain extent, we are also affected by this. Even if the pressure on prices has eased somewhat as a result of the low slaughter rates, it remains the case that for most people today, the decisive factor is now the cost of collection and processing. Exceptions to this are, of course, the heavy male hides, which still realise relatively good prices for the slaughterhouses. The news about the partial suspension of tariffs between China and the USA quickly raised hopes, but if you look at the figures properly and consider that we are still a long way from a real solution, you can only assume that this is a deceptive reassurance. Even if it doesn’t affect us directly, the prices for American hides on the main market in China and then on the other markets too will first have to recover under the changed conditions. This will have a significant impact on prices, particularly for cowhides, even if we are still unable to export directly to China again. What reasons the Chinese authorities might have for continuing to delay the lifting of the import bans due to the foot-and-mouth disease in Germany remains their secret. And so there are always various influences that make a normal sales and trading business impossible. Even if nothing significant has changed in principle, it was possible to place the production that arose this week simply by selling the basic quantities to regular customers, which also meant that the prices hardly changed at all. This is not correct for our calculations, as the hide weights have fallen considerably in recent weeks, which reduces the per unit revenue accordingly. In visual terms, prices have not changed this week either, although the revenues have actually fallen noticeably for the seller in recent weeks.