High costs, low leather prices weigh on tanners’ profitability

High costs, low leather prices weigh on tanners’ profitability

High costs and low leather prices continued to weigh on tanners’ profitability on Monday August 5. On Tuesday August 6, market participants reported a moderate amount of bidding from buyers, such as large footwear tanners, with price levels lower than last traded, which was typical for the start of the week.

Large footwear tanners in Asia were active in the US hide market, whereas small to mid-sized tanneries were quiet or bidding for material at significantly lower prices than last traded levels. Several market participants said that the small to mid-sized tanneries were struggling to maintain profitability in the current market due to tight cash flow.

“Several small to mid-sized tanneries invested in raw material over the past year; coupled with the worsening inflation, [this] drove up the cost to tan and move the material, resulting in cash flow difficulties,” a large footwear tanner said.

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