If you are not always full of confidence and optimism about the state of the market, then you rarely get suggested for the ‘Popularity Award’. Our regular readers will know that for some time now we have been focusing on the lack of demand for leather rather than the possible influence of fluctuating kill and supply. For years now, we have not actually had a time when raw material for the leather industry has been in short supply. Rather, supply is controlled by producers and sellers, and this need not even be bad in principle. If anything, it leads to less volatility and greater price stability. However, the major megatrends of supply and demand must always be taken into account, as well as currency, transport and cost influences. Taking all these parameters together at the moment, it is difficult to be particularly confident about the near future. In our perception, the dark clouds on the horizon are increasing noticeably at the moment. Seasonally, meanwhile, we are going into spring and summer and those have always been the quarters that business and demand for raw materials are not necessarily easier. Beyond that hovers the big question mark of how much inventory has already accumulated along the supply chain in the meantime. Nobody will talk about larger inventories in a difficult environment, because who wants to trigger additional market risks. The

rumour mill is bubbling and there are multiple noises about significant inventories at all levels of the supply chains. The easiest to track are those in the large retail sector, as these often have to be published in the quarterly reports. At the other levels, you have to rely on the information you can get from one source or another. Business this week was again below average. There is very little interest from Asia and for our hides it is certainly because we are simply too expensive by international standards. Without a corresponding adjustment of prices at the slaughterhouses, it will also be very difficult in the near future. Other markets have already started to adjust and the further weakening of the US dollar does not help with the calculations either. In Europe, all market participants are now waiting for the next negotiations for the coming month and, of course, for the resulting prices at the slaughterhouses. Even if one would not like to please one or the other, but only a significant adjustment could give the business a necessary impulse again. With only a few sales, there are still no major price changes, so that the market looks visually much more stable than it is in reality.

The kill

There is still very little news to report from the s. The quantities have settled at a completely normal level for the time of year, without one really being able to understand how all parts can be successfully marketed at the moment. The prices for noble parts in the retail trade are now so high that they are perhaps justified from an accounting point of view, but we don’t see how the normal consumer can or wants to pay that. It looks like the current situation will not change in the short term.

What do we expect

We see rather difficult times for the markets in the coming weeks. In other parts of the world, prices are already starting to come down without you really feeling that price is the decisive factor at the moment. There is simply a lack of demand and one can only hope that this problem will not be with us for a longer period of time. As pricing is still very much dominated by political decisions of the slaughtering industry at the moment, forecasts are very difficult as our market does not necessarily move according to the actual rules of supply and demand anymore. Basically, there is only one forecast at the moment, and that is falling prices.