Market Report 18.08.2023

Osterhorn, Friday, 18.08.2023

The US $ in EURO: 1,0870

What happened this week

The holiday season is slowly coming to an end. While this week in Southern Europe a holiday day on Tuesday still clearly burdened the activities, one now notices that one after the other is returning to his desk. This does not mean great activity on the hide market at the same time, but rather administrative issues that had either been left undone or may be important for the next few weeks. Some people are also starting to think about whether they have everything ready for the trip to China, because it looks like many more people have decided to make the journey to Shanghai than was the case not so long ago. As is so often the case, many people still expect more from these fairs than they can actually deliver in the end. For most, however, it is now more than three years since they were last in this market that is so important for everyone and therefore curiosity drives the desire to travel more than the expectation that there is much to change about the general demand. There is not much new to discover and conquer anyway anymore. After the holiday period, one is forced to deal with the realities again, and these are no longer in the distant future. Whether you are an optimist or a pessimist, the number of possible difficulties that await us in the next month increases almost daily. It is not only the eternally recurring question of what will happen to leather as a material, but it is also, of course, the many changes that are affecting consumers worldwide. This can be seen very well in the behaviour of Chinese customers. The optimism and buying behaviour is fed exclusively by politics. If interest rates are lowered and people believe in supportive measures for consumers – as recently in the last few weeks – they plan and buy. If there is bad news and uncertainty about how and whether to react, demand disappears as quickly as it came. This is what happened this Monday, when various news from the Chinese economy immediately darkened the mood. While in recent weeks the market was very price-sensitive but customers were still willing to buy something in the end, that changed abruptly this Monday. Monday morning still found a number of interested enquiries, but the pattern was the same as in the weeks before. US dollars one to three lower bids, which in previous weeks still always resulted in a sale of some kind. This week was completely different and there can be no more negotiations at all and all interest disappeared almost abruptly on Monday afternoon. We all know that, above all, buyers are once again coordinating activities mainly in Northern China and it was very clear that this happened also during the course of Monday. In Europe there was no activity other than the sporadic deals for niche markets. We don’t know how others have fared this week, but as it stands, not much is likely to happen now until the Shanghai show. It is hardly likely that anyone will make any major decisions before then.

The kill

There are actually no fundamental changes in slaughtering either. Production and demand will continue to be in holiday mode for the next few weeks. In addition to beef demand, you can also see from production and quality that at the moment the slaughterhouses are only operating with skeleton staff. There are so many problems in the meat industry at the moment that are waiting to be solved and decided, it would be a miracle if we have to expect any major changes in the rest of the year.

What do we expect

We really can’t find any arguments at the moment for any change in the market in the next few weeks. On neither side of the table is there the possibility and the need for big changes or the willingness to take a bigger risk. So, wait and see continues to be the motto. Prices are still at a relatively low level for many types. Sustained higher prices will really only be achieved if there is actual evidence that leather demand will increase significantly from October onwards. Should this not be the case, the first question to be answered would be whether all the different hide types are priced correctly according to their real value. Opinions differ widely on this in particular in the male section, but one thing is certain: it will not be too long before the market points the way.

Price Table

Type Weight range Avg. green weight Salted weight Avg. weight salted Price per kg Trend
Ox | Heifers 15/24,5 kg 22,0/23,5 kg 13/22 kg 20/21 kg € 1,10 Stable
25/29,5 kg 27,5/28,5 kg 22/27 kg 25/26 kg € 0,70 Stable
Dairy cows 15/24,5 kg 22,5/23,5 kg 13/22 kg 20/21 kg € 0,55 Stable
25/29,5 kg 27,5/28,5 kg 22/27 kg 25/26 kg € 0,55 Stable
30/+ kg 33,5/35,5 kg 27/+ kg 29/31 kg € 0,50 Stable
Bulls 25/29,5 kg 27,5/28,5 kg 22/27 kg 25/26 kg € 0,90 Stable
30/39,5 kg 36,0/37,0 kg 24/34 kg 31/33 kg € 1,05 Stable
40/+ kg 45,0/48,0 kg 34/+ kg 38/40 kg € 1,00 Stable
Thirds 15/+ kg 25,0/27,5 kg 13/+ kg 24/26 kg € 0,40 Stable
Thirds bulls 30/+ kg 38,0/40,0 kg 24/+ kg 33/36 kg € 0,50 Stable