Friday, 01.10.2021
Market Report

The US $ in EURO

What happened this week: Attending the fair in Milan last week could quickly seem like a working holiday. From the beginning of this week, many news dominated again, which were more negative than positive. Our opinion that the mass leather producers are having a difficult time at the moment for various reasons had to be seen as confirmed this week. The most discussed topic in Europe this week was automotive leather production. Almost daily news reached us about production interruptions or reductions in many automotive plants. From the loss of a few production days in October to complete closures until the end of the year, everything was there. Of course, it is not only the models that are preferably equipped with leather that are affected, and probably even to a lesser extent, but overall the production targets are no longer being met anywhere. It is also becoming more and more apparent that although leather production has remained fairly stable in recent months, the actual shipments to vehicle manufacturers have been significantly lower than they were in production. The bottom line: rising stocks of semi-finished and finished leather. This led to well-known companies announcing that they would significantly reduce production, at least temporarily. It is completely unclear at this point how far this trend will extend and when the automotive manufacturers will be able to  bring their production back to normal levels. However, the problem is not only European, but the same is seen in other regions of the world. Although not everything has a direct impact on commodity prices, the discussion about inflation, rising energy prices and power-cuts in China and the ongoing problems in the transport sector are by no means positive. At the end of the third quarter, the outlook for the rest of the year is thus mixed, to put it positively. This is all the more remarkable because normally the winter half-year is actually reliably strong in terms of production. Meanwhile, it is also noticeable that the relocation of production from Asia, wherever possible, is slowly gaining momentum. The main problem is capacity and labour resources, which limit the trend considerably, at least in Europe. Sales this week were very mixed. From the shoe and bag leather sector we saw good interest. In the furniture sector, things will probably only be decided in the next few weeks and in the automotive tanning sector, decision following the adjusted delivery volumes as well as new prices will also be made in the next few weeks. Thus, sales this week were not particularly extensive, but nevertheless actually better than one might under  have expected
the given conditions. Concessions had to be  made on prices, which ranged between 2 and 5 % depending on the category. However, we do not consider this to be truly representative of the current market situation and the real price level will probably only settle again in the next few weeks.. The Kill:  As everywhere in Europe, the meat business continues to be very difficult. Slaughterings are going up a bit, but we are still rather at the lower end of what you can expect for this time of year. We still attribute this to a large extent to the weather. In the second half of October at the latest, the kill should increase significantly. What do we expect: Last week we talked about the beginning of the price correction and that is probably what is happening at the moment. With further price declines in the USA, further adjustment must be expected in Europe as well. To what extent this will happen quickly and to what extent in the next few weeks is very difficult to judge, as the slaughter industry continues to glorify the commodity market situation. However, increasing kill for heavy males, combined with a reduction in the tanneries' intake, would significantly increase the pressure relatively quickly and this would then spread accordingly. It may take some time, but one almost never escapes the market realities.

Type Weight range Avg. green weight Salted weight Avg. weight salted Price per kg green weight
Ox/heifers 15/24,5 kg 22,0/23,5 kg 13/22 kg 20/21 kg € 1,20

  25/29,5 kg 27,5/28,5 kg 22/27 kg 25/26 kg € 1,10

Dairy cows

15/24,5 kg

22,5/23,5 kg

13/22 kg

20/21 kg

€ 1.00


25/29,5 kg

27,5/28,5 kg

22/27 kg

25/26 kg

€ 0.90


30/+      kg

33,5/35,5 kg

27/+   kg

29/31 kg

€ 0.85

Bulls 25/29,5 kg 27,5/28,5 kg 22/ 27 kg 25/26 kg € 1,20
  30/39,5 kg 36,0/37,0 kg 24/34 kg 31/33 kg € 1,55
  40/+     kg 45,0/48,0 kg 34/+   kg 38/40 kg € 1,50
Thirds 15/+      kg 25,0/27,5 kg 13/+   kg 24/26 kg € 0.50
Thirds bulls 30/+      kg 38,0/40,0 kg 24/+   kg 33/36 kg € 0.55

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