13 Jul 2022

We published the latest edition of our Leatherbiz Market Intelligence newsletter on July 12, with the headline news that a short-term recovery in the raw materials market appears to be in progress.

 

 

The newsletter, which is available for subscribers to read, warns immediately, however, that this “has little to do with the long-term trend in leather demand”.


Instead, it is a reaction to hide prices having fallen to low levels in the second quarter of 2022. “Raw hide prices fell and almost returned to summer 2020 levels, in many cases not far from historical lows,” the report says.


This has coincided with the lifting of covid-19 restrictions in many parts of China and an increase in activity and, consequently, purchase of raw materials there.


However, this is also the last few weeks of activity before the summer holidays for most of Europe’s leather manufacturers and the global geo-political and economic situation is challenging to say the least, making it harder than usual to predict what will happen in the closing months of the year.


“The classic cycle would mean that after a slow start in September, leather production would accelerate significantly in the last quarter and continue through the Christmas break into next spring,” Market Intelligence says. “This usually offered a reliable planning basis for the winter half of the year. So much for what happens in normal times. In basic terms, it will also be like this from October 2022 to April 2023, but the extent of production and leather demand is, in our opinion, extremely uncertain this time.”

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