Bulletin

As with all suppliers times are tough for Belgian traders and suppliers, customers are asking for a slow down on deliveries for those contracts that have already been booked, and to delay discussions on new business until the market situation is clearer.

There are no major bovine hide or ovine skin supplying origins that are now not caught up in the fall-out, following the coronavirus outbreak in China. There will be many tens of thousands of hides in hundreds of containers that will already be on the water, for these would have been shipped just before or during the Chinese New Year, at a time where no one could have predicted the situation we now find ourselves in. 

As can be expected, getting information out of China at this time is not easy, but the reports given to theSauerReport from those working within China indicate that there is next to zero purchases being made, and even the few of those that are being concluded come with the caveat of, only after normal business commences will these contracts be honoured. 

One of the major fall outs effecting our industry from the corona virus within China, is the drop-in world beef slaughter. Already reports from Argentina, Brazil and the U.S. have shown that the halt in shipments to China have resulted in a decrease with the number of cattle being sent to slaughter, added to this the domestic consumption in both Argentina and Brazil has been reducing recently. 

An uplift in demand for cured and wet-blue material from both Italian and Chinese tanners, along with a weakening of the local currency, had left many suppliers feeling hopeful about the market for both the short and medium term business for the months ahead. 

Last week was, as predicted, a slow week for most; this had already been factored into equations by suppliers who themselves had reported to be in healthy sold forward positions. With the news of the corona virus spreading across large parts of China and reports that many tanneries would not open or at best only partially re-open, suppliers seem to have taken the decision to send out their offer lists regardless and see where it gets them. 

The situation surrounding the supply chain and sales of hides into China is still unfolding. Without elaborating further on the effects it is having on the logistics of the goods shipped to the country, touched upon in previous reports, some developments are already emerging. 

Towards the end of January, slaughterhouses in Ireland had put the customers on notice that they expected to see higher prices paid for green hides, presumably as they would have been aware that hide sale prices had started to creep up since the start of this year. 

More business and some optimism have trickled into the Greek trade, although this cannot be said for every selection. In particular, the lower grades of both bovine hides and lambskins have witnessed no price change and are still offered at the same price as around mid-November, whereas the asking prices of virtually every other selection has increased.

On the ovine side, there remains little demand for nappa skins. Some containers of lower grades have been sent to Pakistan, but at cost price just to liquidate stocks. Demand for doubleface skins is yet to really take off also.