19 May 2022
Our latest Leatherbiz Market Intelligence report is low on optimism, alas. Published on May 17, the report is available in the Intelligence section of the website for subscribers to read.
It said bluntly that the risk of leather manufacturers having to close down is “increasing significantly”. It added that the current market’s low raw materials prices were helping, but could not provide a long-term safety net.
It also said the current crises caused by the war in Ukraine and by the covid-19 restrictions were “by no means the sole reasons” for the difficulties the leather industry is facing, suggesting that they have merely “intensified the situation”.
The industry is in its traditionally quiet period, which usually lasts until the autumn, and the report warned that lower sales in the coming months “could very quickly put a negative strain on liquidity in the leather industry”.
This is even more true than usual because of inflation in general and the cost increases for energy, leather chemicals and transportation services in particular.
It says that only an increase in orders from finished product manufacturers can make the situation that some parts of the industry finds themselves in better.