| 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.
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