What happened this week: Most of the European focus this week was on the Lineapelle in Bologna where the trade tried to gather more insight into the present situation of the leather industry in Europe. As often will the opinions vary, but we guess, that most of the visitors will return with a positive feeling. Not so much, because a lot of leather or hide business was concluded, but much more, because the total depression in particular the Italian tanners displayed in the year seems to fade and many started to become more confident about the future outlook again. Medium to higher quality tanners confirmed active sampling what is needed to lay the base for a better future. Despite a lot of bright and candy colours and fantasy designs showed many mentioned also, that more classic articles of style and quality are finding more interest again. Since the Lineapelle is also in particular  a show for the presentation for shoe and bag leathers. A particular focus was also laid on lighter weight materials. Also in this section of the market medium to better quality products were the ones which attracted most of the visitors interest. How has this now influenced the raw

material market and business? A lot of rumours of sales were spread within the trade with the impression of more interest. Some origins were claimed having achieved higher price levels what tempted various suppliers also to increase asking levels. As far as continental European hides are concerned the success has been just limited. Most tanners admit that they have been busy so far and dispose of leather orders for the coming weeks, but leather prices have little or no chance to be increased until the summer break. The constant pressure on the US market does also not allow European prices for hides of average quality to go substantially higher. The Asian market was mainly watching the results and reports from Italy and bidding was just isolated and at best at steady levels. With the softer US$ towards the end of the week calculations did not get any better for sales into that direction either. Sales this week were mainly for Ox/H, lighter weights and some cows into Italy. Prices were mostly steady or fractionally higher for cows. Summarizing we would draw the conclusion that the meeting of the trade has not really changed very much, other than the fear of further market reduction is definitely banned for the next weeks. Some may be

already hoping for a fully reversed market trend. For a sustained firmer price level we would need also higher prices in the US first and the solid round of tanners buying at increased price levels. Most tanners at least pretend that they will step out of the market when asking prices are going to be extensively lifted. The kill: The kill continues further to ease. Better weather and probably also the EU extension keeping farmers at the moment away from selling cattle. Rumours are heard that cattle buyers are already preparing for life cattle purchases in the new EU member countries to arrive at slaughter houses in the West for production in may. This would change quality and weights substantially and we have to watch it carefully.  What do we expect: In the coming week we expect trading to be light. Most suppliers will expect the outcome of the abattoir buying first before offering freely again. Asia will be almost completely on holidays which should reduce activity a lot from that part of the world. We expect offer prices, if any, to be slightly higher to test the market. In general we think , that the tone of the market is better and no downward risk exists. Price increases will be limited and we still believe that the price range we have been trading for a while remains intact, now, however on the upper side