This week (w/c Feb 7) has been a much stronger sales week than most expected. South Korean as well as Taiwanese tanners were expected to be in the market, but the reel surprise has been the amount of business concluded with Chinese tanners. Volumes are obviously down on a normal week but have been high enough for some selections of steers and heifers to have witnessed price increases. The current market is starting to feel as though the bottom may have been reached, with tanners not wanting to risk waiting and paying more. Report by TheSauerReport.

From the Chinese tanners’ perspective, without buying from the U.S. there really is no other viable alternative at the moment. In normal times, they could opt for Australian or South American hides, but both of those origins have slaughter numbers well below 2019 levels and, in the case of Australia, numbers will not start to increase until 2024.

Then there are the European hides, which will start to increase in numbers as we move towards the spring, but freight rates added to the cost of hide prices them out of the market. High freight rates are in many cases stopping U.S. hides being sold in volume to European tanners. And so, we are left with the situation that has prevailed ever since the pandemic started; that the U.S. hide supply needs the Chinese tanning industry to continue buying, just as much as the Chinese tanning industry is heavily reliant upon the U.S. supply.

Wet-blue tanners had much less populated offer lists this week, following on from some high volume sales for much of 2022 so far.