The leather flow
Published: 18 Mar, 2020
Sales of both raw and wet-blue are falling behind the rate that they are being produced, as has been the case for a couple of weeks now. (There have been some exceptions, such as Brazil were slaughtering has been cut back causing a somewhat false impression of the industry, where demand and prices for raw material have actually risen). When the news of the virus first came out of China and the subsequent self-imposed close down, suppliers were able to fill the void by offering to other destinations to keep the flow moving. But there really was no long term substitution for China. Now that supplies can start to return to China as reports emerge of more and more tanners returning to full production, there is another problem; that problem is leather demand. Slowly over the past few months the demand for leather had started to increase along with the price of raw material; suppliers were starting to believe that 2020 could be a turning point. But now the whole trade has been thrown into turmoil with consumer demand at rock bottom; it must be said that this is not a leather industry problem, we are just one of the many manufacturing trades caught out. But, how many other trades could say that their two biggest world markets (China and Italy) have been affected so much, if someone set out to disrupt the leather industry, it could not have done a better job than this virus. With February showing a 90% drop off in new car sales within China and now major fashion brands such as Gucci and Louis Vuitton cutting back on orders with their Italian suppliers. Some within Italy are reporting that unless the world returns to normal within mid-April then 2020 will be a complete disaster.
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