What happened this week: This week extended the trend seen already last week. With major events such as the trade shows in Shanghai and Paris, as well as the start of the GDS shoe fair in Düsseldorf, dominating the discussions most of the trade was either here or there. The most important of all was certainly Shanghai and one was able to see that this show might overtake Hong kong soon in its importance.

Many took the chance to combine a visit to the show with an extended trip throughout the Far East and with many ending their voyage in Shanghai there was a lot to talk about the industry situation and experiences during the visits. Despitethe fact that that a few visitors were not fully satisfied with the volume of sales in Asia there was a full consensus that the shift of production- which  started from the USA to Asia some years ago- has now reached Europe and is in full swing.

While talks to tanners in Europe in the past months have been increasingly depressing, with a majority complaining about lack of orders and insufficient leather prices, the indications are that, in Asia at least, orders are not a problem. Shoe tanners as well as upholstery manufacturers are busy, positive about their future and only complain about the high raw material prices which we have reached during the year. Impressively, they seem to be completely untouched by the outlook of the world economy- only the Iraq crisis is something they seem genuinely concerned about.

As a consequence, one can believe that domestic order outlook and  expectations for USA orders for the coming month must be at least reasonsable. The shift of production is at least giving them growth potential despite the moderate situation in the western markets. Sales for us had been good again and we benefited from the high US prices which gave us – combined with a mid week firm USD – easy inroads at our present asking levels. Sales were across the board again with mostly females and low grade again being the hides of major attraction. Most of the sales were overseas with most European markets still complaining about the situation.

The kill: Slightly rising but no real change to the positive yet. Temperatures are now falling and this should support also in the coming weeks..

What do we expect? We are heading towards the next round of abattoir buying and, with the present market conditions, we continue to believe that for the near future the current narrow trading range will sustain.