Market report 20.05.2022
Osterhorn, Friday, 20.05.2022
The US $ in EURO 1,0540
What happened this week
It has changed very little, or rather nothing at all, in the general factual situation this week. The market is still not finding the right balance, despite all the efforts of the sellers to present the general situation as better than it really is. The large number of concerns that the leather industry has today about business now and in the future ensures that only the absolute minimum of demand is being met. Although the kill in Germany continue to be seasonally very low, the basic business is still not enough right now to satisfy and sufficiently place the entire production. It is simply not enough that there are of course always isolated hide types that find enough buyers in the end, at whatever price, but rather a whole number of different hide types remain unsold and the fear that these will remain without customers for a while grows from day to day. Of course, the situation in China plays a particularly important role here. Without the demand and sales there, the entire accumulation of all grades and weights is simply completely impossible. Whether the slow openings in Shanghai are already sufficient to revive sales to China sufficiently in the coming weeks still seems rather doubtful. What is also difficult in this context is that once again the abattoir prices for May could not be reduced to a competitive level. It simply makes no sense to close one’s eyes to the fact that the hide types that have to hold their own in international competition are simply still far too expensive. If one also looks at the price levels in other European countries, it is all the more incomprehensible that
the meat industry continues to demand and defend price levels, especially for cows, that have nothing whatsoever to do with the global prices of its competitors. In markets like these, rumours and scattered reports about sales are another great evil. On the one hand, buyers in China in particular are striving for the famous “catastrophe” and on the other hand, many slaughterhouses and their sellers are still claiming price levels that certainly do not correspond to the current market situation. This results in a very large price difference that can hardly be bridged in normal day-to-day business. As a consequence, sellers and buyers alike hold back and in the end only what can really and absolutely not be avoided is concluded. In this situation, it is also very difficult to talk about concluded deals and their prices. For us, this week was also a rather quiet one. The prices we were told and which were circulating here and there in the market were simply not negotiable and on the other hand we cannot develop any interest in the overseas markets with our price demands at the moment. As a result, sales this week fell short of hopes and expectations and were limited to sub-varieties in particular and, fortunately, quite substantial sales of lighter goods. This has once again postponed the problem and the discussion about a possible price determination for the standard hide types to the coming weeks.
The kill has not really changed at all for weeks. The level remains stable at the same numbers as it has been for almost two months. There is also almost no shift between the different hide types, only the weights continue to fall as spring progresses.