Look to the west - the International Council of Tanners (ICT)
22 April 2016Leather Industries of America (LIA) reports on the state of trade for the International Council of Tanners (ICT) in the US tanning industry.
The domestic US leather industry spans a wide range of companies that process or sell leather in the US. Today, there are only a handful of US companies that produce finished leather from fresh or salted hides. There are another half a dozen or so major companies that process primarily fresh hides into wet-blue for sale in the US or abroad. Most US tanners and leather finishers purchase wet-blue or import crust leather as their raw material for producing finished leather. Leather Industries of America (LIA) represents the vast majority of these companies, as well as companies that import and sell finished leather to customers in the US. LIA also represents the suppliers to the industry, including chemical companies, and hide producers and brokers. LIA currently has 35 member companies.
Overview of 2015
The US leather industry suffered a very difficult year in 2015. High hide prices (especially in the first half of the year), coupled with a strong US dollar and overall global economic weakness led to a substantial decrease in US exports of finished leather, wet-blue and salted hides. Record-setting auto sales in the US, along with steady economic growth continue to make it a major consumer for leather and leather articles, and thus a target for imports of auto leather and footwear.
One new tannery, Mississippi TanTec, opened in Vicksburg, Mississippi, in 2015. None of the operating tanneries in the US closed last year. Overall, leather manufacturing in the US seems to be stable, even though production in 2015 was down.
Trade statistics for 2015
LIA tracks trade statistics from data compiled by the US Department of Commerce and US International Trade Commission. The US Department of Labor no longer tracks employment statistics for leather producers.
Leather exports
Overall exports of leather, including wet-blue, from the US decreased by 20% in 2015 from 2014 levels. The value of US leather exports in 2015 was $1.4 billion, a decrease of $353 million from 2014. The value of finished leather exports was $612 million.
Mexico remains the largest export market for US leather, including wet-blue that is retanned and finished in Mexico, and finished leather that is cut and sewn in Mexico for automobile upholstery. China is the second-largest export market for US leather, primarily wet-blue. Overall exports to China in 2015 decreased by 23.1%, to $296 million. Exports to Italy decreased by 20.7% to $186 million. Japan and Vietnam are the next largest markets for US exports at $153 million (down 0.9%) and $125 million (an increase of 14.1%), respectively.
Wet-blue exports
57% of all US leather exports by value are of wet-blue. China continues to be the largest customer of US wet-blue leather, accounting for $267 million dollars, a decrease of 28%. This amount is about a third of all US wet-blue exports. Italy is the second-largest market, falling by 20% to $176 million in 2015. Overall US exports of wet-blue decreased by 20.9% in 2015 for a total value of $794 million.
Leather imports
Leather imports into the US fell only modestly by 2% in 2015. The largest importers to the US are Mexico, Italy, Brazil and China. Mexico accounts for over 70% of the total value of imports. Much of this total is in the form of automobile upholstery. Imports of crust leather from Brazil fell by 10%. This leather is finished in the US, primarily for upholstery and auto leather. Total leather imports into the US were over $2 billion in 2015.
Cattle hide exports
Cattle hide exports from the US were down by 10% in 2015. Exports to China fell from 11.0 million to 9.8 million pieces. Exports to Korea and Mexico were flat, exports to Taiwan and Hong Kong fell significantly. Overall cattle hide exports fell 10% to 15.3 million pieces. China accounts for approximately 64% of the US export market for cattle hides.
