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United States – prices falling to keep hide sales turning over

Published: 12 Jun, 2019

Three weeks of unexpected good sales has meant, that suppliers last week were said to be holding out for bids closer to their asking prices. But the result of this means that sales reported last week and early this week were well down, coupled with fewer overall bids coming out of Chinese tanners in general. Despite the recent upturn, the underlying fact remains that 2019 so far has been a poor year for sales and many suppliers are reported to be out of position; this time of the year being in a forward sold position is viewed as the norm. The consensus would therefore indicate that, to keep sales flowing into China, the suppliers will be the ones to blink first. Those that have reported new sales are in the region of US$1.00-2.00/hide lower than previously booked. Recent sales into China has resulted in many tanners indicating to hold good stock levels, this can afford them to be even more bullish in the market.   

Concerns continue in China over the tariffs imposed on finished leather products sold back into the U.S. There is talk of these tariffs being shared between the exporters and the importers. It is unlikely the resulting price increases will be passed onto the end consumer, who already has less appetite for leather than previous years. Some Chinese producers are said to be talking about moving their manufacturing out of China and into countries such as Thailand and Vietnam. In the long term this could be a solution, but it’s not something that can be achieved overnight.

Like last week, wet-blue quotations came down US$2/hide on a large number of selections on offer. The weakness of wet-blue not only mirrors that of salted material, but the volumes sold after the exploit at the end of April were not as sustained as the latter's. This means that while, for brine cured hides the sacrifices in terms of price has at least paid off in terms of volumes, this cannot be said for wet-blue, or not to the same extent. Additionally, wet-blue is subject to a heightened competition on international markets (especially from Brazil), as it is from threatened from cheap salted hides and high inventory levels around the world. To read more click here.



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