It remains the case that these are somehow strange times. Normally, one should follow the old stock market wisdom: Sell in May and go away! and only really participate in the market again in September. A true picture of the market situation is not so easy to find at the moment. It is indisputable that relatively large quantities of certain hides are globally still available. It is also true that the Chinese leather industry is slowly regaining its footing and is definitely making its presence felt again every week. It is also true that the sellers‘ and buyers‘ expectations are very far apart and that there is little prospect of realising the sellers‘ price expectations for the middle and lower qualities. This means that again deals are concluded that are far below the officially published price levels and are therefore usually not multiplied. Again and again rumours and information leak out about individual deals in which larger quantities are mentioned at low prices. Since neither buyers nor sellers have much interest in publicising these deals, it always remains somewhat nebulous what was actually done and what happened. Somehow the market is completely divided into two parts and the spread of prices continues. On the one hand, you have the lower quality goods that are more than abundantly available at the moment and can be bought at really low prices. On the other hand, there is good demand for veal and calf replacements, where one gets the impression that there is rising demand. Last but not least, there is the market for the good and heavy stuff, which in one way

or another shows it under pressure in terms of price, but on the other hand continues to be in an obviously more or less balanced supply and demand situation. So, everyone is looking at the segment of the market that they think is most suitable for their purposes. Business-wise, this week was rather average. Better than what we have seen for a long time, but also worse than one could deduce from it a real improvement in the market situation. This means that the week is not yet suitable for deriving any new positive or negative price trends. Every deal and every contract remains fiercely contested and every time it is the agony of choice whether to sell or keep the goods. In the next few weeks the renewals of the current programs in Europe are coming up and in addition everyone is now waiting for the prices at the slaughterhouses, which normally should see significant reductions in the sum of all markets due to the currency development and the below-average proceeds alone. It is good to remember that for the first time in a long time, interest was evenly distributed across all categories. What is less pleasing is that the prices that can be achieved in Asia are still not what one would wish for.

The kill

The kill remains unsatisfactory. This week was also shortened by a public holiday and in the remaining days the numbers were also below the quantities that should actually be expected. The meat business remains poor and slaughterhouse utilisation well below normal levels. On the one hand, the livestock figures actually show sufficient supply, but on the other hand, the meat business is simply too bad and the burden of staff shortages and costs at the slaughterhouses too high to expect any improvement of production in the short term.

What do we expect

We can hardly imagine that there will be significant price changes in the next few weeks. Major unsold stocks are still pressing and, at least in the short term, it does not appear that any tanner has such large orders and such low stocks at the moment that they would commit to higher prices. Higher leather prices also seem unthinkable at the moment. On the other hand, it remains unclear how high the sales pressure is with one or the other supplier and whether there will continue to be discreet individual transactions that are only used to liquidate stocks and thus have to be very price flexible. Thus, the market continues to move in a fog and clear contours are not yet really recognizable. Cheap hides cant go down much any further and expensive hides look too expensive, but need to be bought either.