Market Report 19.07.2024
Osterhorn, Friday, 19.07.2024
The US $ in EURO: 1,0900
What happened this week
Onwards and upwards into the holiday season. In the next two weeks, the last of us will probably go on our well-deserved summer holidays. Even more so than in previous years, a break seems to be really necessary at the moment. On the one hand, to recharge the batteries for the upcoming challenges and, on the other, perhaps to think about how to proceed with leather demand and production in the near future without the daily routines. There is no doubt that new ideas are needed and that we must say goodbye to the leisurely routine of the past, in which there was only a continuous up and down. In many regions of the world, the leather industry is facing a turning point. It is never the final end, just a simple ‚business as usual‘ and hoping for an automatic improvement in the situation hardly seems to be a viable and successful strategy at the moment. Otherwise, this week was once again characterised by the title ‚and every day the groundhog greets the groundhog‘. There is less talk about business at the moment than about the daily news and rumours surrounding the situation on the leather market. Only a few of these are really positive. Mostly it’s about how much stock is waiting for customers, how much capacity may be further reduced and, of course, the question of whether the leather industry will look the same after the summer holidays as it does today. A lot is already centred around the question of whether the trade fairs in Shanghai and then later in September in Milan can really be the trigger for a quick and strong turnaround. There is little to suggest this at the moment. The overall geopolitical situation and, of course, the economic situation in some countries speak against a quick and positive turnaround in consumer behaviour. Leather in particular and the products that are made from it require a positive and optimistic mood. At least until the elections in the USA, there is certainly no clear basis. First of all, further developments on the interest rate markets will probably also play a role. The state of consumer sentiment has also been reflected in many company results from the fashion industry this week. The latest news about large stocks of wetblue hides waiting for customers in Northern China is not helping to brighten the mood either. The business and sales of hides this week were again rather negligible. The monthly negotiations with slaughterhouses and regular customers are due again shortly and then probably very little, if anything at all, will happen before the trade fair in Shanghai.
The kill
Experience shows that there is not much to report on the beef production side at this time of year. Sales in the food retail trade are significantly reduced during the holiday season and are only partially compensated for by the increased consumption in the restaurants in the holiday resorts. The significant increase in prices in restaurants is also barely supporting consumption with holiday makers opting for cheaper dishes. Individual slaughter days continue to be cancelled and in the next four weeks we will probably see the lowest production figures of the year.
What do we expect
Forecasts remain relatively meaningless. For many hides, we are now rapidly approaching the critical price level at which the collection and processing of the hides begins to become economically questionable. As has been said so often, the market actually always solves all problems and if there is not enough demand to achieve sufficient returns, then fewer hides will be obtained and made available. This is already the case in many countries today. Should this also become a reality in Europe, it would have a significant impact on the structure of the entire supply chain. Many processes would then have to be rethought. In the meantime, let’s hope that the success of leather in individual sectors will spread to the masses and other sectors.
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 | € 1,00 | Weaker |
25/29,5 kg | 27,5/28,5 kg | 22/27 kg | 25/26 kg | € 0,80 | Weaker | |
Dairy cows | 15/24,5 kg | 22,5/23,5 kg | 13/22 kg | 20/21 kg | € 0,50 | Weak |
25/29,5 kg | 27,5/28,5 kg | 22/27 kg | 25/26 kg | € 0,50 | Weaker | |
30/+ kg | 33,5/35,5 kg | 27/+ kg | 29/31 kg | € 0,50 | Weak | |
Bulls | 25/29,5 kg | 27,5/28,5 kg | 22/27 kg | 25/26 kg | € 0,90 | Weak |
30/39,5 kg | 36,0/37,0 kg | 24/34 kg | 31/33 kg | € 0,90 | Weak | |
40/+ kg | 45,0/48,0 kg | 34/+ kg | 38/40 kg | € 0,95 | Weak | |
Thirds | 15/+ kg | 25,0/27,5 kg | 13/+ kg | 24/26 kg | € 0,40 | Weak |
Thirds bulls | 30/+ kg | 38,0/40,0 kg | 24/+ kg | 33/36 kg | € 0,50 | Waek |