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Germany - Market is in a bubble

Published: 27 Apr, 2022

As with most other major hide producing origins within Europe, there has been a slight softening of the market, but nothing to get excited about. It is as if everyone in the industry knows that European hides are overpriced, but no one wants to be the first to say it. The longer this situation continues, the larger the price correction may have to be. 

As has been reported many times recently, European hide prices have been acting in some form of bubble immune to the wider world, but these wider world forces are starting to be felt. Business with Chinese tanners has almost dried up and this puts further supplies of hides back into the system, most of these hides are cowhides. Not only are Chinese tanners either working on a restricted basis or closed completely, but they are also reporting a slowdown in finished leather orders from both export and domestic consumers. Then there is the war in Ukraine, which will have an impact on hide prices directly or indirectly. Germany has the largest automotive industry within Europe, and you really need to look no further to see how component shortages and economic pressures are continuing to hit hard on production. The automotive industry has been running below capacity for some time, and orders for new vehicles are so delayed that some cancellations are being received. Consumers across the continent are feeling the energy increases and maybe a new vehicle is no longer high up on their priority list.

German slaughter remains below par, and this is maybe the only reason at present why hide prices are generally being called as stable.

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