Market Report 28.06.2024

Osterhorn, Friday, 28.06.2024

The US $ in EURO: 1,0705

What happened this week

This week, too, just a glance at the calendar to make sure that we are not yet in the peak holiday season. There are actually still a few weeks to go before the European tanners go on holiday and then see their peak in August. It is usually July that sees a significant slowdown, but this year the holiday phase slowly began at the end of May. The only hope that remains, at least for the European leather industry, is that there will be another flare-up of activity before the lockdowns. Otherwise, all that remains at best is the completion of the current minimum quantities that are necessary to keep the companies in production. In phases like this, there is always a lot of talk. People are looking for information that could provide clues as to how the production of leather and the demand for hides and skins will actually continue in the near future. When there are few facts, hope, speculation and rumours abound. Of course, there are those who believe that optimism is the order of the day and are therefore predicting a significant recovery by late summer at the latest. Although there are very few signs of this at the moment, it is at least conceivable that, on the one hand, raw material stocks in the leather factories may be reduced too far and, at the same time, the seasonal upturn, which will certainly also take place this year from September, could possibly trigger an improvement in the market situation. However, this would also require the assumption that there will be no build-up of stocks in the supply chain over the next few months. Even if the kill will of course remain at a lower level over the summer, new hides are coming into the system on a daily basis and if they do not flow out immediately, a market must first be found for them. So far, there are few signs that leather factories are outsourcing parts of their production to contract tanners during their company holidays. At the same time, this means that either the hide have to be salted or the suppliers have to process the goods into semi-finished products at their own risk. Sufficient customers would then have to be found for these as well. As always, the option of Asia remains. The same applies here, albeit with the changed prerequisite that there is no summer break. Production is usually continuous and here, too, the question arises as to the stocks of raw materials. At least for cows, which for us are the main product for the Asian market, the business for furniture leather does not appear to have any particularly positive prospects and customers can obviously afford to wait and hope that prices will continue to fall. Global suppliers, however, see little point in lowering prices at the moment and it does not appear that this could really stimulate demand for the time being. As you can easily see from the above, there was very little to report on the week’s active business. Individual transactions occur again and again, but we did not see any serious increase in volume or clear indications that demand needs to be met. The individual transactions moved in very narrow ranges around the last prices, although we do not necessarily deduce a stable and balanced market situation from this.

The kill

The boredom also extends to slaughtering. Both volumes and live cattle prices are moving very little, so we can assume that supply and demand are largely balanced at the lower level. In the next few weeks, the school holidays will begin in some federal states and this situation is therefore unlikely to change significantly until the beginning of September. However, the slaughter statistics up to and including April did not show any particularly sharp declines in the kill in 2024 as far as the figures are available.

What do we expect

Many like to use the outlook for the future to spread optimism. This may seem understandable and expedient from a salesman’s point of view, but fundamentally we feel that it is better to rely on the facts. In our view, the facts are relatively clear and this means that they will continue to change very little, if at all. However, this is particularly due to the fact that neither the buy side nor the sell side feels any convincing reasons to change the status quo much at the moment. Bargain hunters around, but not much more. This will probably remain the case for a while until at some point the pressure to buy or sell will have to determine the decisions and trigger new directions.

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 Weaker
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 € 0,90 Weak
30/39,5 kg 36,0/37,0 kg 24/34 kg 31/33 kg € 0,95 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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