Friday, 29.10.2021
Market Report

The US $ in EURO

What happened this week: After many weeks in which business tended to drag along for us and was not exactly synonymous with dynamic commodity trading, the situation changed abruptly this week. Further proof that fact-based developments can be delayed, but not prevented. So all the waiting came to an end and after some of the bigger players had to realise that time was not playing for them this time, things moved pretty fast during the week. At the beginning it was the heavy bull hide that started the opening of the market adjustment. The great uncertainty in the automotive leather industry as to how vehicle production will continue, combined with a rising kill, led to the ultimately logical consequences. It became clear to salesmen that, on the one hand, price is not even an issue for many tanners at the moment and, on the other hand, those who are still able to continue their production are now being asked and forced to make the necessary price adjustments after the overshooting levels of spring and summer. Those who wanted to secure their programmes for the next few weeks and deliver their goods had to accept that prices had to be corrected and in some cases very significantly. For us, the only astonishing thing about this development was that it obviously surprised one or the other. The higher the dependence of the commodity on the  automotive sector, the greater the markdowns. From Thursday onwards, the skins of the other sectors came increasingly into focus. Inparticular, customers in Asia, and here the tanners from northern China, suddenly appeared out of nowhere and demanded offers. Here it was mostly about the classic hides for furniture leather, i.e. cow hides. After the price corrections of the past weeks and due to the fact that the price gap to the international markets for these goods was not so great, the price reductions here were much smaller, if there were any opportunities and interest in sales at all. The bottom line is that this week actually only brought to fruition what was long overdue. The prices for the various types no longer reflected the real situation of supply and demand and this has been adjusted to a large extent in the last few days. Of course, the market remains affected by all the problems that are  discussed for weeks now. However, this does not change the fact that every tanner who wants to continue to run his factory in the coming months has to think about the supply of raw material under the given circumstances. In the case of furniture leather, we are in the peak manufacturing season and it may almost be too late for adequate supply in the case of China. Anything bought now will not arrive until after the Chinese New Year and thus not until the end of the production cycle. Sales volumes turned 
out to be quite significant this week, and this means that the EU tanners are once again well supplied for the coming weeks. Depending on the last base price, prices for bull hides for the automotive industry fell by 10-20 % and have thus approached a reasonable level again. For cow hides, the adjustment was more moderate and was in the range of up to 5 % - although here the volume was much lower and here too, of course, the previous basis was of decisive importance.
The Kill:  This week the kill increased significantly and are slowly starting to approach normal levels for this time of year. For males, average weights are below normal levels, whereas for females, average weights are at normal levels or even slightly above, as the case may be. From this, everyone may draw their own conclusions for the situation on the live cattle market. In the coming weeks and with falling temperatures, we expect this development to continue. What do we expect: The correction that we had been expecting for a long time and has taken place. This has certainly taken a lot of tension out of the market for the moment. Next week, the new market conditions will now have to be implemented at the slaughterhouses as well. We expect the situation to calm down somewhat in the near future. Fundamentally, however, we do not yet see any fundamental change and with a pause some more downward potential.

pe 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 € 1,10

  25/29,5 kg 27,5/28,5 kg 22/27 kg 25/26 kg € 1,00

Dairy cows

15/24,5 kg

22,5/23,5 kg

13/22 kg

20/21 kg

€ 0,90


25/29,5 kg

27,5/28,5 kg

22/27 kg

25/26 kg

€ 0.85


30/+      kg

33,5/35,5 kg

27/+   kg

29/31 kg

€ 0.80

Bulls 25/29,5 kg 27,5/28,5 kg 22/ 27 kg 25/26 kg € 1,15
  30/39,5 kg 36,0/37,0 kg 24/34 kg 31/33 kg € 1,40
  40/+     kg 45,0/48,0 kg 34/+   kg 38/40 kg € 1,40
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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