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Germany – opportunities scarce

Published: 15 May, 2019

The bottom line of the state of the trade last week didn’t change much from the prior ones. Decent business on the all-important European market, and negative conditions on the Chinese front.

In Europe, the successful tanneries are holding their ground against the slump in leather demand, with some of them even picking up the business of those players which in a way or another are leaving the scene. Price discounts on leather are expected and granted, which in turn are a reflection on lowering price of hides: likewise expected and granted. In the case of bulls, for instance, the price indicatively came down between €c20-30/kg in the last couple of months, both for the northern and the pricier southern origins. Based on early March prices this means a 15-20% drop for the former and 10-15% for the latter, depending on weights and supplier.

The Chinese destination remains troublesome. Opportunities are scarce, and speculation rife, with bidders apparently more intent in bottom-fishing and market probing than actual purchases. Even so, it is quite likely that some supplier in dire need of fresh cashflow will consider even very low bids. What will often come bundled with this type of sales are risks of renegotiations, claims or delayed payments down the road. “Seller beware” could well describe the current business climate in the trade towards China. 

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