Asian tanners hold firm

16 April 2003

The four-week period ending March 3 was one of change in the US hide market. At the beginning of February, packers were able to continue pushing prices up as South Korean tanners and traders offered higher and higher bids for heavy Texas steers. Then, by mid-February, the market begun to swing in the other direction and split in two. Some producers were asking for prices nobody was prepared to accept and other traders, who were sufficiently forward sold, were able to accept offers on tanners' terms. The latter trend continued on towards the end of February when many tanners, especially South Koreans, held firm and refused to pay the higher asking prices, forcing packers to lower their demands. Industry sources indicate that prices may fall further until the Asian leather market improves, and this may not be until around the time of the APLF fair in Hong Kong in April. By the beginning of March, prices for heavy Texas steers had fallen to lows of around $67, although buyers were still showing signs of reluctance. Branded steers fell $0.501 compared with the previous week with prices averaging around the $63 mark on 62/66lb averages. Colorados fell to $60 with unconfirmed reports of sales as low as $59. Business remained quiet for heavy native steers and hiefers, with the former between $71-71.50 and the latter between $61-62. Total raw hide sales for the four-week period ending February 20 averaged 492,450. As ever, South Korea was the most active buyer, taking an average 186,275 hides, followed by China with 110,600, Taiwan with 40,625, Mexico with 32,125, Japan with 23,075, Hong Kong with 16,200, Italy with 12,150 and, unusually, Uruguay with 6,375. Total raw hides shipped for export against previously sold contracts averaged 487,000 and outstanding sales averaged 3,980,400. Total wet-blue split sales averaged 74,450 but the total was brought down by a spate of cancellations from Hong Kong and China in the second week. Nevertheless, Hong Kong took the majority of hides with an average 19,975, followed by Taiwan with 17,850, South Korea with 9,875, Mexico with 9,625 and Italy with 6,250. Weekly wet-blue exports averaged 257,950 and outstanding wet-blue sales averaged 613,725. Total wet-blue split sales averaged a very large 1,029,450lb, boosted by a fourth week total of 3,285,100lb, 2,700,000lb of which travelled to Italy. Hence Italy took an average 750,000lb for the four-week period, followed by Hong Kong with 202,350lb and Mexico with 108,825lb. Weekly wet-blue split exports averaged 873,650lb and outstanding wet-blue split sales averaged 13,466,750lb.

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