A game of quarters – inside the Italian tanning industry

22 April 2016

The Economic Department of UNIC (Italian Tanners’ Association) delivers a business overview of the Italian tanning industry and raw material prices for its sector.

Overall price indexes for bovine raw hides showed substantially limited variations in the last quarter of 2015, though the monthly breakdown by main type shows diverse trends, also in volatility terms. Calves, steers, heifers and bull calves were stable from October to the year’s end, with minimum monthly variations (upward and downward), while cows showed more notable variations, which were positive in October and November, then negative in December. Bulls posted a decline in October and then were unvaried until the beginning of the new year. During the first months of 2016, the prices of small and medium-sized bovines (calves, steers, heifers, for example) and sheepskins have lost more than 10% on average. There were some increases for cows but bulls were stable.

The bovine wet-blue index posted a 2% average increase in the final quarter of last year and no substantial variation at the beginning of 2016.

Average sheep/goatskins prices went down during the fourth quarter of 2015 and the first weeks of the current year. The highest valuable materials in the EU (lamb) kept recording a different and autonomous trend (rising).

Tanning production

The preliminary figures on total 2015 production show a limited decrease in terms of volume (-2.5% in square meters, -20% in kilograms of sole leather) and value of the overall production (-1.7%).

Markets and products

As far as it concerns the main animal typologies, 2015 saw declines for calf and sheep leathers. A negative sign for the medium-to-large bovine segment (but limited to -2% in volume, substantial stability in values); while, on the other hand, goat leather increased. Even the ‘other animals’ category marked a decline.

The most dynamic destination sector has been, once again, car interior manufacturing; with some partial rebates from the leather goods sector, while demand from the footwear and furniture industries, have been seen as highly volatile.

The value of exports – still covering more than 75% of total turnover – decreased by nearly 2% last year from 2014. Among the main destination countries, there was a 9% loss on China (which is confirmed as the main foreign destination, with a share of 16% of total exports); and growth in France (5%), Poland (15%), the US (13%), South Korea (8%) and Vietnam (21%). Germany also decreased (-17%), together with Spain (-5%), the UK (-7%) and Romania (-9%). Portugal was stable.

2016 trends

Forecasts concerning the demand in the first part of 2016 appeared to be a little pessimistic because of the slowing down of some top fashion customers and the general uncertainty of the global economy. Some improvements are expected for the second half of the year. The first official figures available (January 2016) show a volume decrease of 3% in the tanning production from the same period of the previous year. ?

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