Another uneventful week on the hide market is coming to an end. We are once again in a phase in which everyone knows what is going to happen, but it is not one of the core competencies in this industry to deal with situations early and deeply. In principle, it is not necessary to repeat everything we have already written in the past weeks, but there is simply no way around the fact that many circumstances, not only the war in Ukraine and the closure in China, are affecting the demand for hides at the moment. The main problem for us, however, is not only the decrease in demand that we have to face every year at this time of the year, but especially the fact that prices in our region for most types are simply too far from the world market level. Of course, the slaughter industry is just interested in keeping the prices for the by-product as high as possible and for as long as possible, but this does not change the fundamental conditions. Just because the problem is postponed, it is not solved. We would just prefer slow and floating price adjustments to recurring sharp and short-term jumps. What is also not so extraordinarily difficult to determine an appropriate market price in the international context, it would therefore also not so extraordinarily difficult to react moderately and with foresight to the market development. At the moment, the market is divided into only two factions. On the one hand, the tanners who, due to the just-in-time policy, depend on the regular and uninterrupted inflow of raw material, and on the other hand, the tanners who, due to

stockpiling, are able to stay away from the market for a certain period of time. In a very simplified form, these are the overseas buyers and the industrial production in Europe. This leads to the fact that the price development between those, which must make themselves available again and again for some compromise and those, which can buy to a large extent if they would like and consider it appropriate at present again far apart. By the longer Easter break, which at least with us for two shortened weeks ensured, the problem was once again postponed. If one could feel at all interest overseas this week, then the ideas of the buyers were far below the current asking prices and oriented themselves on the one hand to the lower prices from other origins and on the other hand to the attempts once to test how far the sellers are already ready to go. This should not have had much success. In Europe only in the next week again the seriously increasing discussions begin over the next prices and then it will become with security very exciting with which conception the European tanners into the next price negotiations will go. This will certainly also give a clear reflection of the business situation and the question of whether one or the other may not already be thinking of a reduction in production due to declining leather demand and possibly already has in the back of their minds the now rapidly approaching summer break. Neither in volume nor in prices is there much to report for us this week.

The kill

The kill continues to drag along as they have. At a rough estimate, we would say that about 70% of slaughter capacity is being utilized at the moment. We have no idea what could stimulate business right now.

What do we expect

We are very tempted to just repeat our statements from last week. It is quite simply because it has changed absolutely nothing in the situation and the market must first seek a reasonable balance between supply and demand again and a resulting solid price discovery. We can hardly imagine that this will be possible without a downward adjustment.