What
happened this week: That's it for
the year 2021! Normally, now would be
the time to take another look back and
summarise the developments. But to be
honest, that doesn't make much sense
this year, because when has there ever
been so much talk and discussion about
what happened in the past as there was
this year? Actually, hopes are always
replaced by experiences, and this year
was no exception. The difference in
2021was probably essentially that
positive surprises used to happen just
as often as negative ones, but this year
the negative surprises outweighed the
positive ones. The greatest hope was
certainly that the pandemic would end,
and unfortunately it turns out that we
are very little better off today than we
were a year ago. Vaccination has
achieved a lot, but it has not been able
to eradicate the virus or render it
harmless. If you take your mind off the
pandemic for a moment, you can see that
even during a pandemic the hide market
does not behave much differently from
what we are used to. A steady up and
down. However, there have rarely been
years when there was even less reaction
to the facts than to the emotions.
Similarly, we can hardly remember years
in which such strong |
fundamental
influences were evident and thus
actually provided a fairly good
basis for forecasting. In addition to
the usual supply and demand data and the
direct influences of the pandemic, the
massive impact of international
logistics problems and the length of
supply chains has probably often and for
a long time not been sufficiently
factored into the decisions. People are
simply not used to the fact that it
should not be possible to get the goods
delivered from A to B according to their
wishes and plans. The effects of this
are so manifold that they have, in our
opinion, also been extremely
underestimated for the supply chain of
the leather industry and become a
significant amplifier of the basic
factors. For the first quarter of 2022,
the influences remain difficult to
assess. The largest market, China, in
addition to the disruption caused by the
Chinese New Year and the possible impact
of the Beijing Olympics, is still
struggling with the possibility of the
pandemic spreading again. The
government's rigorous measures would
once again have a significant impact on
economic life and thus also on supply
chains. Logistics problems, rising
energy costs, inflation and geopolitical
conflicts could also have
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a
very rapid and intense impact on
market conditions.
However, the world never stands
still, only that in all likelihood
much more short-termism and probably
also simply more luck will be of
decisive importance for business
decisions still for a certain period
of time. Business in the current
week was almost exclusively limited
to isolated sales to China.
There was interest in
higher-value goods and smaller sales
were possible with smaller price
concessions. However, the last week
of the year is hardly
representative.
The Kill: As
expected, the kill was low. This is
likely to continue in the New Year.
The big uncertainty now is the further
development of the pandemic, which can
have a quick and strong impact on
demand, but also through possible
production losses. Under normal and
stable circumstance the kill in
January should settle at a level about
20% below December. What
do we expect: We expect
little activity for the first week of
the New Year. In Europe there is
little need for action until week 3/22
when the next negotiations for buying
and selling will start. In Asia, we
continue to expect individual random
trades rather than a clear trend. We
wish our readers a healthy, successful
and happy 2022!
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