Market volatility only favours a few

The Seaward blog
Published:  13 April, 2015
Andy Seaward

It's now just over a week since I returned from APLF, a week that included a nice Easter break, which included some decent weather and feels like Spring is upon us. It’s given me time to reflect on the recent APLF in Hong Kong from a safe distance, I think as a result I can take a more balanced view.

As has been said many times before the salesman returning with a bulging order book or a buyer attending with the intention of laying down large or even small orders is a thing of the past, fairs are much more about networking, discussion and confirming relationships away from the office, a chance to really concentrate on particular issues and problems.

As always, price seems to be the number one topic, but I found at this fair a much more relaxed approach to pricing, perhaps because we are currently in a "falling" market or as I like to call it a “readjusting” market. We will see unfortunately some buyers trying to take advantage of the market and trying to "make up" for the high prices of previous seasons, as we will see some sellers trying to take advantage of buyers with limited experience of the market. However, what I took from APLF was that these people were in the minority. There is a dawning realisation that the only way to negate these highs and lows of the market is to work together, build relationships and talk together.

We (tanners and leather buyers) will always be driven to a certain extent by the swings of the raw material market, but what we need is more consistency and less volatility. I firmly believe that a supply chain that works and talks together can have a major influence. The big swings in the market I am sure are only beneficial to a small minority but to the majority of us it’s a major headache and a time consuming headache at that. Over the years you win some and you lose some.

What I found at the APLF this year was that there is more sensible discussion, there was more of a feeling that we are in this together, the best out come is a win-win situation rather than a win-lose scenario. I have said in previous blogs that the supply chain should work from the animal through to the final customer and the only way that this will work is if everyone within that supply chain works to their best to achieve lead times, quality or price. In Hong Kong I saw the beginnings of this happening, it won't evolve overnight and there will be some set-backs. There will also be the doom and gloom merchants who revel in major swings or trying to anticipate major swings (usually after the event!) but I really felt there was a positive approach from brands, tanners and chemical companies. I hope the same feeling was felt by others as I am convinced that only way the whole supply chain can work effectively is by working and talking together to help flatten out the volatility in leather pricing in the coming months and years.

Andy Seaward

Director, Seaward Material Solutions

andy@internationalleathermaker.com

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