THE
WEEK IN REVIEW
During this
week South America in general, has not very active, as, apart from the carnival
dates, also the Chinese New Year holiday has put a stop on most demands from
that side.
But prices,
in Brazil and Argentina, have been adjusted according to the new reality of the
market for raw hides.
It’s
difficult to tell what will come next, after the Tiger’s New Year holidays ends
and also after some European countries come back from their carnival dates as
well.
If the market
will be accepting and going ahead with the new price idea, or if this is going
to create a new situation?
RAW
HIDES
Confirming
our suspicious and the trend we were noticing, raw hides in Argentina suffered
an adjustment according to its demand.
We have been
noticing the higher demand but we did not have yet the list of raw hides
prices.
The same
thing is going on in Brazil this week. Raw hides are already more expensive.
Please see
below the up dated prices for both.
WET
BLUE & CRUST
Please
see below the adjusted prices in each case. It’s not something that makes so
much noise, but it’s going up all the time non-stop…
SOME
FIGURES AND/OR SNAP SHOTS
In what
regards trends and statistics, the last statistic research from Brazil, shows
that the country is exporting less finished leather and more wet blue hides and
even more crust leather.
In fact this
should not be that too surprising. It’s the natural trend.
First of all,
Brazil will never export all of it’s production in finished leather instead of
crust or wet blue. It would be a dream if such a thing would happen, but due to
the worldwide circumstances, it has almost no possibility to become true.
And second,
the trend for the fore coming times, will be this.
That exports
of crust will increase a lot but not that much on the finished leather.
It might
happen even that one day Brazil doesn’t export anymore it’s raw hides nor the
wet blue hides, and that most of it in crust, but most of it in finished for
sure not.
There so many
factors that leads us to this conclusion that this is something already
expected. But also, due to internal circumstances that consider production
capacities etc, Brazil cannot also think in not exporting any wet blue anymore
(and also it will need to export some raw hides from time to time). It’s a
need.
What would
happen with splits, for instance? Is there capacity for tanning everything here
and retanning? No. There isn’t even for the grains. Would it be competitive
against Chinese tanning costs? No.
Are all
Brazilian tanneries willing to sell the finished leather directly to the end
user (shoe factories, furniture factories and car brands?
Of course
yes. Is the market prepared for something like that, and will it allow such a
thing to happen? Of course not.
There lots of
different implications involved, rgr ubxkysw technical, political, convenient,
time frames, quality issues and more.
It’s not a
decision taken just like “from now on, we are only going to sell finished
leather”.
If it was
that easy, all tanneries would be already selling finished leather since long
ago. It seems sometimes that some people forget this…
Some results
about this are like that the consultant that comes with the great solution: “I
think you have to reduce costs, improve production, sell more and spread your
profit margin”.
Wow! Really?
PRICES
Prices in Brazil
(Most of the prices below are the current prices that we know to be the
ones being really used and at which there are business in the market.)
Click on chart to view underlying data.
Wet blue,
whole hides, machine flayed, full substance, average 48/52 ft, average 24 kg
Selection TR1
at around $ 1.25/ft CFR and it’s said that even more in some cases as it was
reported sales around the level of $ 1.30. The current asking price for TR1 is
still above $ 1.30 now.
Selection TR2
at around $ 1.15/ft CFR.
In sides, we
can say that prices are about these:
|
|
substance
2.4/+ mm
|
|
|
|
|
|
|
selection B
|
$ 1.30
|
|
|
selection C
|
$ 1.20
|
|
|
selection D
|
$ 1.00
|
|
|
selection E
|
$ 0.85
|
|
The crust
leather for upholstery, in substance 0.9/1.1 mm, in sizes varying from 48 to 56
ft:
$ 1.20/ft CFR
for selection TR1
$ 1.10/ft CFR
for selection TR2
The
automotive upholstery leather, in substances 1.1/1.3 to 1.2/1.4 mm, stucco and
buffed, at:
$ 1.30/ft CFR
for selection TR1
$ 1.20/ft CFR
for selection TR2
Prices in Argentina
Click on chart to view underlying data.
The crust
leather for automotive upholstery, in substance 1.1/1.3 to 1.2/1.4 mm, has been
sold at levels like:
$ 1.35/ft CFR
for material that can either be stucco and buffed for the most requiring
customers, but usually sold for full grain type of leather.
And at $
1.15-1.20/ft CFR for a medium grade, stucco and buffed.
For
upholstery crust leather, we can find prices from $ 1.05 up to 1.40/ft CFR,
depending on selection, grain, region, substance, etc.
For shoes, in
substance 1.2/1.4 mm, natural/not dyed, prices have been:
TR1 - $
2.10/ft CFR
TR2
- $ 1.70
TR3
- $ 1.30
Everything
below is considering the usual brine cured, no bulls. Range weight for salted
is 14-19 kg and for fresh hides is -/24 kg.
Please note
these are the average prices, so it might happen someone is paying more (for
the higher end) or less (for the lower end) depending on the region.
Buenos Aires
/ Mendoza
|
Steers
|
$ 1.05
|
|
Cows
|
$ 0.65
|
|
Heifers
|
$ 0.85
|
