This week: All eyes last week were on the Lineapelle exhibition in Milan. Coming just two weeks after the All China Leather Exhibition in Shanghai, this was our next opportunity to get an overview of the situation in the leather industry.

The fairs in Milan and Shanghai could hardly be more different. In Shanghai, the focus is mostly on the global, standardised mass market, the local market in China and on the middle- and lower-price segments. The event in Milan is about diversity and fashion, with a focus on the middle, upper and highest-price segments.

There have always been difficult phases, but the creativity, confidence, commitment and optimism of the leather industry have always been in evidence at Lineapelle. As low as the mood may have been, this fashionable spectacle always provided something of a boost to confidence. This time, however, it is possible that many will have come away with even less enthusiasm than they had before.

There were too many worries and, above all, much less confidence among a large proportion of the exhibitors than one is used to, even among some of the unconditional optimists in the industry.

Of course, there were also niche manufacturers who continued to speak of positive results. However, the vast majority are simply suffering from a lack of orders and, above all, a lack of news from their customers about any rapid and sustained improvement in the order situation. This means there is a structural problem: the leather has not yet made a breakthrough in the minds of enough manufacturers and consumers as a good material to use.

We therefore assume that the majority of visitors will return from Italy with rather subdued impressions. Speaking for ourselves, we did not take away the impression that there were any major successful transactions for raw materials at the fair. For us, Lineapelle was an event for niche products and the smaller, very specialised customers with their special items and small production runs. We still have to do everything we can to keep regular customers and be available as a supplier for basic requirements.

Price is rather secondary at the moment, which can also be seen from the fact that prices are still not moving significantly despite the difficult situation. The question that arises, however, is whether all available hides will find a buyer, or whether the surplus hides may already be in use for other purposes, thus preventing further price pressure.

The kill: The seasonal increase in the kill took a short break during the week. This may be due to the weather on the one hand, but presumably also to high livestock prices on the other. Whatever the reason, the kill fell slightly this week, but we consider this to be a temporary phenomenon and therefore expect slaughter volumes to recover in the coming weeks.

What we expect: We do not see what could really and decisively move the markets in the coming weeks. After it became official last week that a well known Spanish leather manufacturer is to close its doors for good, it is clear that the structural problems in the industry can hardly be solved without surprises and adjustments. You just don’t know when these might happen. Events of this kind can move the markets significantly.

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