| What
happened this week:Price,
as we know, is one side of the coin and
demand for material is the other. In
Central Europe, the problem is now
developing that for certain hide types,
and
here we are essentially talking about
the heavy male goods for the automotive
industry, there is currently not enough
demand for the entire supply. There are
various reasons for this, which have
already been sufficiently discussed. The
fact as such would not actually be so
remarkable if it did not become
increasingly apparent that many
slaughterhouses and suppliers did not
see the
situation coming. This remains
remarkable in view of the many available
facts
that had already existed for months. In
the course of the week it was confirmed
more and more that there are many
producers who are desperately trying to
sell
their production fresh and chilled. This
is difficult because it gives the
impression that most tanners have
already more than adequately covered
their
needs for the next few weeks. So, what
often happens is that all sorts of
sensible and senseless prices are passed
around without triggering any change
in the balance between supply and
demand. The real problem, however, lies
in
two areas. First, there will be little
change in the oversupply over the next
few weeks simply because of the higher
kill figures. Question: What is done |
with
the material? There are not very many
options. First, you could salt the
product and store it until the situation
eases. Secondly, one can tan the goods
and wait, or look for other and
new customers with them. Thirdly, one
can lower
the prices so much that the goods become
attractive again in other markets. The
last option does not seem to be one. It
is also not particularly inviting for
two reasons. Firstly, many producers
would have to accept considerable losses
in revenue and secondly, there is of
course the question of the future and
thus whether the raw material would not
be needed at some point in 2022 and then
- as has already happened several
times in the past - flowed off in
another direction and thus no longer be
available. These are certainly the
decisions that are being intensively
discussed today both in the slaughter
industry and in the leather industry.
The
problem, which we have often pointed out
in the past, is above all that the
prices for this product had moved too
far away from the market realities in
the
second quarter and that the correction
must now be all the more painful. For
the other hide types, especially cows,
there is also noticeable market
pressure, but it is much less because
prices for these types have not risen so
much and demand has not collapsed
so much
due |
to
the more stable furniture
leather business. Sales in the
current week were rather sporadic.
Quite a
number of emails were received
from Asia asking for offers, but in
the end the bid
prices were much too far away to be
acceptable. The main interest was in
low grades and other items
that were at least visually
inexpensive. The overall volume of
sales this week
was well below average. The focus is
now on the price negotiations with
the
slaughterhouses, because they will
decide to what extent our goods will
be
competitive at all in the next few
weeks.
The Kill:
Slaughterings continued to
rise this week.
Due to the high cattle prices and
the difficult calculation in the
slaughterhouses, as well as the lack
of manpower, the productions were
not at
the level that one might have wished
for and expected. Skin weights for
females
are increasing, while for males they
are stagnant and certainly a little
below
average for this time of year.
What
do we expect: The
market continues to be in a
discovery
phase at the moment. The demand
worldwide is not really large enough
at the
moment to absorb all the hides
produced. This situation will
certainly continue
for a while and sales will therefore
have to be geared to the
competitiveness
of prices compared to other origins
and will determine the sales
quantities in the future.
.
|