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Leather Pipeline - Blocked raw material stocks start to move again
12 December 2019

There is encouraging news from China that some of the piled-up stocks of hides that have been lying in warehouses for months have begun to move into production. “We are receiving confirmed information that a good deal of the stocks that had been sitting in warehouses, in particular in China, have been or are in the process of being cleared,” the report says. Report by Leatherbiz.

While this is good news because it frees up space in the supply chain for hides from more recently slaughtered cattle and hints, at least, at an increase in demand for finished leather among consumer product manufacturers, the report includes two important caveats.

The first of these is that the volume of hides that abattoirs are producing each week, especially in the Americas, is big because the demand for beef remains strong and slaughter statistics are high.

Secondly, processing the older material now is likely to bring scant commercial reward for tanners. If, as seems likely, most of this material is at the lower end of the quality range, the chances are the finished leather it makes will have to compete with synthetics. According to the Leather Pipeline report, this means tanners will have to sell it at “prices that barely cover costs”.