Hide and skin values remain under pressure
Prices for cattle hides and sheepskins are struggling amid lower demand and finished leather sales remaining uncertain.
After a notable period of stability, UK heavy cattle hide values have taken a dip in recent weeks. The supply chain continues to be squeezed by increased cost of production (such as cost of energy, chemicals and cattle), and demand for finished leather in sectors such as furniture and automotive remains sluggish.
Commentary from market analysts TheSauerReport suggest that European tanners are well stocked ahead of the traditional August shutdown period, with orders now coming through for the September restart.
Reports out of China suggest that tanners there have been keen to secure available supplies of high-quality European cowhides, as demand from continental processors slows into August.
Some improvements in Chinese upholstery demand have been seen recently, with shipping rate reductions and strengthening exchange rates also improving returns. However, strengthening exchange rates make Chinese purchases more expensive, which has reportedly impacted sales more recently.
Price data for ovine skins shows that on the whole, product remains a cost to abattoirs. Market reports from the continent suggest that Turkish buying activity has quietened recently amid political elections. Supplies of new season lambs from the UK and Ireland have been slower to market compared to a year ago, while continental production has seen more mixed performance so far this year.
Some industry reports suggest that other fifth quarter products are also under pressure currently, further challenging margins across the supply chain.
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