Market Report 24.05.2024

Osterhorn, Friday, 24.05.2024

The US $ in EURO: 1,0835

What happened this week

The fundamental market situation has again changed little, if at all, this week. Almost everywhere, discussions are increasingly centred on the demand for leather and orders for production. Of course, the leather business is not standing still and of course the companies are producing and therefore also need hides and skins. However, the total number of orders is neither large enough to fill capacity, nor is it sufficient to process the entire global volume of raw materials, nor is there sufficient confidence that this will change in the coming months. It is also true that this does not apply linearly to all regions and leather types. Nevertheless, it describes the overall situation correctly and has been valid for a long time already. The image that a tablecloth that is too small can be pulled back and forth again and again, but that part of the table always remains uncovered, fits quite well here. And so the people involved tug at all ends of the tablecloth, but the table is never completely covered. However, the hope that the tugging on the tablecloth will eventually stretch it so that it is big enough again does not die. You just have to be careful to realistically estimate when it might tear, if you pull too much and for too long, and that you don’t see short-term success as permanent. As long as the tablecloth is too small, the situation will not change and only those who are pulling the hardest at that particular moment will make a profit. As a result, we are fighting for the necessary market share along the supply chain to ensure that the goods flow out regularly. In addition to the fundamental problems, we are of course also having to deal with seasonal influences at the moment. Spring and summer are not the strong production periods in most of the leatherindustry. For this week’s business, this means that we are continuing to struggle through the period at the usual level of the session and that stable customer and supplier relationships are currently the only guarantee for a secure sale of goods and so the top value aspect. In this context, it cannot be emphasised often enough that, due to the quality of European raw materials, it is actually always possible to secure a sale, and that it is therefore only necessary to make a fair and realistic assessment of the value and price of the goods in international competition. The market always regulates this in the end, but you can save yourself relatively useless trouble. Business was quieter again this week. At the moment, sales are mainly focussed on regular buyers, while overseas buyers in particular are currently trying to find out how far they can push the market down and when the right time might be to get back in. This is not new again or particularly surprising at this time of the year. For some, this may end successfully, but the past has also taught us that many are mistaken in their excessive ambitions. Prices have a natural limit on the downside due to the cost of collection and processing. As a result, it was actually only possible to conclude deals with European customers this week, whose small volumes were at stable or slightly lower levels. The price ideas of customers from Asia are not realisable at the moment and were therefore not acceptable. It will probably still be possible to achieve such poor prices later in the summer – if necessary. The price cycle that we are familiar with, especially for cows from Asia, still defines the price limits quite clearly.

The kill

Another slaughter day was missed this week and next week at least one more day will be cancelled in the Catholic parts of the country, which means that slaughtering will be reduced again next week. The beef business remains at a quiet level for the time of year and both supply and demand are in line with the season.

What do we expect

It is difficult to keep a cool head during these phases. The mood is poor and the support from China that we had over the winter is now wobbling. This may all be temporary, but there are still no positive signs for the near future. The focus must therefore remain on the regular outflow of hides and the question of how this can be guaranteed. It is up to each individual to draw their own conclusions. From our point of view, there is little reason for a trend reversal and any improvement can only really occur towards the end of the summer when it becomes clear what the demand and use of leather will look like next season.

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 € 1,05 Weaker
25/29,5 kg 27,5/28,5 kg 22/27 kg 25/26 kg € 0,80 Weak
Dairy cows 15/24,5 kg 22,5/23,5 kg 13/22 kg 20/21 kg € 0,60 Weak
25/29,5 kg 27,5/28,5 kg 22/27 kg 25/26 kg € 0,60 Weaker
30/+ kg 33,5/35,5 kg 27/+ kg 29/31 kg € 0,55 Toppy
Bulls 25/29,5 kg 27,5/28,5 kg 22/27 kg 25/26 kg € 0,95 Weak
30/39,5 kg 36,0/37,0 kg 24/34 kg 31/33 kg € 1,00 Toppy
40/+ kg 45,0/48,0 kg 34/+ kg 38/40 kg € 0,95 Toppy
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 Toppy

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