17 September 2021
For the past 25 years, maybe a bit longer, China has been the go to place for many European raw materials suppliers. Some stayed loyal to Italian tanners, while some hedged their bets and kept a foot in both camps. But whatever way to go, Chinese tanners with their volume purchases dictated the price, on all but the higher quality material that many of the Italian tanners are renowned for, writes The Sauer Report.
Normally, over the summer, when most European tanneries were on their shutdowns, trade to China and other Far Eastern destinations was at its height. This year the shipping logistics along with their ever-rising prices have subdued this business (for now at least). The prices for containers have more than doubled in the past year, and the number of containers available has halved, meaning you are paying twice as much for a very poor service.
As we know, the price of the transport has been added to the value of the hide, making it now no longer as economical. If reports are true, that it may take several years for the shipping to return to normal, then we may have a supply versus demand problem on our hands; just as soon as the slaughter rates start to increase. Prices must surely fall, with Italian tanners knowing that for once there is no viable alternative outlet for European hide suppliers. And what will happen to the low grade hides that European tanners do not want?