Actually, almost nothing or very little changes from week to week. At the moment we are in spring and people are happy about the better weather and the many holidays. It’s the same situation every year, and depending on how strong the demand is, it puts more or less pressure on the business. This year the declining kill and the interruptions actually come at the right time and are welcome. Whereas otherwise almost every hide is missing and all the suppliers have been struggling to get the deliveries for the fresh deliveries complete on time, this year it is actually rather welcome if the one or other batch perhaps cannot be delivered on time. In any case, so far we have not heard any complaints that a tanner is currently lacking goods and deliveries despite the reduced quantities. Statistically, the kill in Germany in the first quarter were clearly above the figures of the previous year. Thus, more raw material has actually been supplied to the markets than the leather business – according to the general impression – really needed. Whether all the hides were actually tanned for the real existing leather demand or, if so, whether some of them went to the semi-finished warehouses, still remains the very big question that occupies almost everyone’s mind. Looking at the business and the sales, it can be said that the regular programs are still being served in Europe and the available goods are obviously well sufficient to cover the current demand. Demand from Asia has improved somewhat in recent weeks, but this should not lead to the misconception that this also

means that higher prices can actually be achieved due to large sales. At least from China they continue to try to push prices down and simply test who and how much selling pressure is in the market. Of course, it is particularly easy at the moment because there are more than enough alternatives around the globe that one can also fall back on without problems if necessary. In principle, it means that we can benefit a little bit from the improved currency situation this week, but negotiations on prices actually end relatively quickly. Either you accept what the Chinese customer wants to pay or you have to look for other and hopefully better customers. One also does not get the impression that customers in China are really buying against a real leather demand at the moment. It rather looks like they are trying to build up the cheapest stock now, in order to possibly profit from it after the summer. The old Chinese syndrome remains: it is not the best leather sale that counts, but the cheapest raw material purchase. The last quarter will show whether this is actually a successful strategy. In view of the low kill, the sales this week were sufficient, but under the same conditions at least the pressure on the hides, for which the Asian market is also needed, will certainly increase again in the next few weeks.

The kill

The kill remains low and due to the public holiday on Thursday the numbers were very small. That puts a strain on operations and costs everywhere, but that it the same situation every year. The next week we have a full production week only to lose another day the week after. The weights are slowly starting to fall and we don’t have the impression that the meat business is improving significantly.

What do we expect

We have long been of the opinion that it would be more sensible to lower prices moderately in Europe to avoid further market risks. Unfortunately, due to the policy of the slaughter industry and its affiliated marketing organisations, this has not been possible for quite some time now. As a result, prices have been moving in a very narrow range for weeks or months. In the next few weeks we will slowly enter the decisive phase in which it will become clear whether and how much stock there is and, if there is, whether the suppliers want to carry it through the summer. With the best will in the world, we cannot see any improvement in leather demand in the next few months, and without that there will hardly be any improvement in demand for raw materials. In principle, of course, the current game can be continued for a very long time. Only at some point the realities, positive or negative, will take over again.