Bulletin

After a long period of stability, it has been reported by several hide sellers that they have taken much lower prices from Italian tanners to maintain business. Some of the new business for the top weight hides has been concluded with reductions, with the caveat that similar price reductions will be needed for the next round of sales.

We might only be in May, but Italian tanners are already thinking about the run-up to the August shutdowns. Automotive leather sales have been sluggish for some time due to the stop/start nature of that business following on from the continued component shortage. 

The French hide market has been described by one commenter as slow. The Covid lockdowns continue in China and the difficulties in the ports coupled with good quantities of available stocks of hides on the ground there do not give any sign that the market is about to pick up soon.

After a good summer of sales, leather goods traders are hoping that winter brings a cold spell of weather, which will help kick start the leather boot business.

Some U.S. suppliers are openly talking about their concern for the hide market. There is the perfect storm for hides to remain under pressure. Beef sales are going through the roof with huge profits being made by exporters, meaning they can pay high prices to farmers to keep the cattle rolling into market, with the knock-on effect being a continuous high supply of hides, all at a time when Chinese tanners are either closed or not operating at usual capacity. 

The most surprising part about the latest update on German hide prices is that there has been little next to no movement. Although, this is not just isolated towards German hide prices but for almost all European hide prices. While the rest of the world watches prices coming down at a rapid rate, here in Europe there has been minimal price decline. 

The global leather segment is very much dictated by the volume of supply coming out of the U.S. and the size of demand from Chinese buyers. There are of course some other very big players such as the Italian and Indian tanning industries and the Brazilian supply and tanning industry, but little nowadays has so much influence on hide prices as the U.S./China trade.

As is well documented when times are economically uncertain then consumers spend less. The only exception to this is the high-end luxury fashion element of the business, which is generally immune from outside forces.

The latest round of wet-blue sales to both Italian and Far Eastern tanners are well down on recent prices, which really was to be expected. Not only are suppliers from this region up against a large U.S. supply of material that has been discounted in recent weeks, but they also come up against Chinese tanners who now have plenty of hides in stock following several weeks of inactivity.

Following the upward trend on split prices over the past few months, which was driven by the high demand along with the price for collagen and gelatine, the market in Italy has started to stabilise.