Leather, the demand uncertainty slows down pricesDuring the first half of 2018, the tanning industry saw its production volume increase (+4.6% in square metres) but not in value (-3.8%).
“The widespread global economic uncertainty and the different demand trends from the most important material destination sectors seem to partially obstruct the expansion of prices” explains the “Market Insights” elaborated by Lineapelle’s Economic Service. In short, the market still likes Italian leather but prices remain low due to an uncertain demand that is only good in some sectors, especially car interiors and leather goods.
The trend is similar also in terms of exports, which in the first part of the year decreased by 4% in value, but increased in volume (+ 12.1%). Among the main foreign destination countries, the Chinese area (China plus Hong Kong) remains the first international landfall of Italian hides, with a share of 12% of total exports, but recorded a decline in value of 19%. Also decreasing are Romania (-8%), USA (-12%), Germany (-6%), Poland (-18%), United Kingdom (-23%), South Korea (-15%) and Bulgaria ( -2%). Shipments to France (+ 4%), Spain (+ 5%), Tunisia (+ 12%), Albania (+ 9%), Serbia (+ 40%), the Czech Republic (+ 3%), India (+ 8%), Hungary (+ 2%), Mexico (+ 33%), Slovakia (+ 23%). Vietnam and Portugal are substantially stable.
The slowdown in turnover has characterised the results of all main Italian districts, with Veneto, the first national tanning district, appearing less penalised compared to others.
Looking at the performance by type of leather, Lineapelle’s note shows that the growth in overall volumes is attributable to medium-large bovines, especially if they are destined for car interiors and leather goods. Greater difficulties are highlighted for small leathers (calves, sheep, goats), for leather soles and, in general, for footwear, furniture and clothing. By contrast, the leather demand in the automotive sector, both in Europe and in the United States, remains positive.