| What
happened this week: Slowly but
surely, the end of the year is
approaching and with it the need to plan
delivery programmes during the
interruption caused by the Christmas
holidays and Chinese New Year. The field
is of course particularly difficult this
year because the productions of the
slaughter industry and the leather
industry do not harmonise very well at
the moment. Normally at this time of
year we have both higher slaughterings
and overall higher production in the
leather industry. Sometimes there have
been problems in synchronising
production, but overall the winter
half-year tends to be an easier period
than the summer half-year. This year is
a bit different, because the decline in
automotive leather production is not
very compatible with the increase in
available raw material. At the moment
there is a lot of talk about how long
and to what extent production will be
interrupted in Europe due to the
Christmas holidays. The holidays are
actually very convenient this year, and
probably under normal market conditions
the interruption would have been rather
short and for a week at most. This year
the range is much wider and there is
every variation on offer from one to
three weeks. In the next few weeks the
final decisions will |
probably be
made. At the moment, people in Europe
are more busy planning deliveries than
concentrating on new sales. The first
price corrections for November
production have now been made at the
slaughterhouses, but whether these will
be sufficient will only become clear in
the next few weeks. The leather industry
has also been hit hard by the
substantial increases of cost. Energy,
chemicals and labour costs have
increased or will increase
significantly. At the moment, lower raw
material prices are seen as a way out to
mitigate the price increase for leather,
and the market environment has made it
possible to increase the pressure
accordingly. The considerable price
corrections since the summer have led to
an increased willingness to restock
among customers in Asia. This does not
mean that there is any mercy in price
negotiations, but at least at a certain
price level there is a willingness to
buy. The difficulty, however, is to
balance this appropriately at the
moment. After strong market movements,
it is not uncommon that new theories
about the future development quickly do
the rounds and that is why opinions
about the price development of the next
months are once again far apart. This
week's business |
essentially
depended
on the extent to which one was
willing to come closer to the price
expectations of the customers. There
was definitely greater interest,
especially from Asia. However, as
always in a weaker market, the
prices were clearly below our
expectations. In the end,
compromises could only be reached on
the sub-varieties. In Europe, the
rising Covid-19 figures caused
additional uncertainty, as at the
moment no one can say what effects
and political decisions this will
have. All in all, the pressure on
the market remains and it will
probably take a while before a
general equilibrium is found again.The
Kill: The kill
has now settled at the expected high
level. We are in the middle of
November and this is now the time of
the highest slaughtering in our
region. Hide weights remain
relatively high for females, while
males remain below previous years.
What
do we expect:
From
our point of view, the market is
still in its finding phase. We
continue to see a need for
adjustment, especially for male
products, while the pressure on
female skins is at least temporarily
somewhat lower. For the time being,
however, the ability to deliver
regularly remains more important
than the price – at least for many
and for the rest of the current
year.
|