This week: The situation in the Middle East remains a near-daily talking point in the news, with consequent effects on the financial and commodities markets. It is now very clear, in Europe and in overseas markets, that the high level of uncertainty is likely to be a greater factor affecting the markets than the facts themselves. However, the financial markets remain relatively unfazed by the uncertain overall situation.

Energy prices are rising everywhere, with the corresponding impact on sentiment and cost calculations. It takes a certain amount of time for everyone to form a clear picture of what impact energy prices might have on their entire supply chain and consumption. It is rather unlikely that any reliable conclusion can be reached, despite all the analysis. In such phases, it is hardly surprising that decisions regarding the procurement of raw materials and production are postponed for as long as possible.

This is also reflected in our market, where, although we did not expect much activity immediately after the Easter holiday, Easter week can safely be described as inactive.

In particular, overseas markets, which we had regarded as more reliable in recent weeks, were disappointing. In China, falling prices for lime splits appear to be weighing particularly heavily, as well as dampening sentiment, which is affecting cost calculations. The weaker US dollar had also to be recognised and asking prices and revenues got more difficult to debate. In short, sentiment in the industrial mass production of leather has deteriorated rather than improved. Niche and specialist sectors are less affected by the general circumstances and so remain relatively untouched by the market sentiments. However, these small volumes do not really determine the market.

For sales last week, this meant that only small deals were concluded, and these were concentrated in Europe and, as ever, on the famous specialities. Otherwise, the situation was such that one could not even get annoyed about bids being too low, as there simply were none.

The kill: Slaughter numbers remain low. Prices for live cattle continue to fall, and as things stand at the moment, it does not look as though this is likely to change much in the coming weeks. Here too, the overall rise in energy prices and the general mood are playing a significant role. Price is once again a decisive factor in purchasing decisions, and this also applies to food in Germany.

What we expect: We simply can’t find any real arguments that could be used to point to any significant new trends. Of course, prices for cattle hides should fall again under the current circumstances, but all of this naturally depends on how the slaughterhouse groups respond to the current market situation. Relatively low slaughter numbers are not yet creating any significant selling pressure, at least for the moment, but this certainly does nothing to change the underlying situation or the quite substantial stocks along the supply chain. So, there will probably be little change to the official price lists until, at some point, new decisions have to be made on how to deal with the situation. It is likely that, this time too, it will not only be the general market laws of supply and demand at play, but other forces may also come into effect.

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