8 December 2021
A new edition of our Leatherbiz Market Intelligence market report went online on December 7; subscribers can read it in the Intelligence section of the website.
This new report notes the impact on commodity and finance markets of the new omicron variant of the coronavirus, but argues that, so far, the leather sector has stood up to it better than others.
Its explanation is that this is mainly because of the stable situation the leather industry has at the moment in China. “Demand in the Chinese consumer markets seems to be strong enough to encourage leather producers there to continue replenishing their raw material stocks on a regular basis,” it says.
Falling hide prices in recent months have proved to be a strong incentive for tanners in China, but the report says it also looks likely that leather producers in China have healthy order books for the first quarter of 2022.
As caveats, the report points out that interruptions to production will come when China has its new year holiday on February 1 and, possibly, for the Winter Olympics in Beijing, which are due to begin on February 4. It also says that on its own, the industry in China cannot absorb the whole global production of raw material.
More immediately, it makes it clear that the Chinese leather sector is not immune from the ongoing global supply chain constraints that are affecting products of all kinds as 2021 comes to a close. As an example, it quotes the US Department of Agriculture as saying there are well over 1.5 million raw hides awaiting shipment from traders, tanners and packers in the US at the moment, many of them destined for customers in China. “The bottlenecks in international sea transport are far from being cleared,” it warns.