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China – Tanners unsure whether to buy or wait

Published: 15 Dec, 2021

A cloud of uncertainty hangs over the finished leather market, according to one tannery group, although so far this has not put the brakes on hide buying. Good volumes of hides continue to be purchased from the U.S., which has a large slaughter figure to sell weekly, and there are also more hides being offered with each passing week from European suppliers.

Normally you would think that, with uncertainty in the market, tanners would hold back. The trouble this time around is, although there may be more U.S. hides available, this does not make up for the fact that the Australian hide supply is best described as very low, along with a South American supply of hides which are much lower than a couple of years ago. This leaves tanners with the want to slow down, but with the need to keep buying. If anything should happen to the U.S. supply, there would immediately be a severe shortage of hides. Both U.S. suppliers and Chinese buyers need each other more than ever.

Prices have eased on many steer selections in recent weeks, and this is a trend that is likely to continue – not only is there less demand for finished leather from the automotive industry but, even if they start back straight away at full capacity, it would take a long time to eat through the built up inventory of finished leather.

Cowhides remain in hot demand to satisfy the requirements of the furniture industry, normally there is a drop off in demand coming into the New Year but that is not the case this time around. Such is the demand for raw material that many more heifer hides than usual are being utilised. Tanners expect to remain active in the market right up until the Chinese New Year period. After that is hard to call, and remains open to too many variables, not least being the continued Covid-19 problems.

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