What happened this week: There was little excitement this week. Sales were isolated and the weak US dollar made calculations even more complicated.  Despite the fact that the price of grades has increased in the US over the last two weeks, European hides no longer have any price advantage. Euro revenues haven’t changed very much since the beginning of the year and - in our view - many made the mistake to convert the stronger demand for European hides in the first quarter into the traditional assumption that prices have to go up. Well, they don’t and they haven’t come down anymore, resulting in hide processors having to pay increased prices in April, in particular for cows at the abattoir.

Hides are on average are overpriced by around 15% at the abattoir, since sales are now additionally depressed by the weaker US dollar. A sharp correction of the abattoir prices is required and as usual this will either come immediately or will take place later, although this has little to do with the selling market. Within the currency fluctuations selling prices have remained within the ranges seen since February. Changes are based on daily transactions; however the tremendous pressure on leather prices is still in place and continues to be reflected in the downgrading of raw materials and the massive resistance against price increases.  Decisions made by the Chinese Government are still having an impact on the finances of Chinese tanneries and one can easily see that access to credits has become much more difficult. We should never forget that the biggest problems in our markets are always derived from the financial side rather than as a result of supply and demand.

This week, the majority of sales were of cowhides and any attempts to compensate the falling US dollar value with price increases were unsuccessful. European cow buyers once again showed resistance. The market for bull hides has made some improvement for spot deals during the last few weeks, but we should not forget that this was and is just hole filling and is not yet consistent.  The kill:  The kill remains on the very low side – as is usual in May. Also for the coming weeks we are still burdened with holidays and the pre-school holiday season is in full swing. So for the next weeks we won’t see any change, however the low kill is in most cases is enough to meet the demand - except in speciality cases. What do we expect: We are now entering the low season of leather production. Basically the market is intact, because lower kills meet lower demand and we still do not see any major change in prices. However, abattoir prices have had to be significantly corrected (s.a.) in order for them to reflect market revenues for hides. Selling prices will remain at the levels we have seen for some time now, however due to the increased pressure in euro terms, because of the weaker US dollar, sellers will defend their positions with the low kill, because until abattoir prices have not been adjusted there is nothing to donate other than losses.

Type	Weight range	Avg. green weight	Salted weight	Avg. weight salted	Price per kg green weight	Trend
Ox/heifers	15/24,5 kg	22,0/23,5 kg	13/22 kg	20/21 kg	€ 1,55	Weaker
	25/29,5 kg	27,5/28,5 kg	22/27 kg	25/26 kg	€ 1,37	Weaker
Dairy cows	15/24,5 kg	22,5/23,5 kg	13/22 kg	20/21 kg	€ 1,50	Weaker
	25/29,5 kg	27,5/28,5 kg	22/27 kg	25/26 kg	€ 1,36	Weaker
	30/+      kg	33,5/35,5 kg	27/+   kg	29/31 kg	€ 1,22	Weaker
Bulls	25/29,5 kg	27,5/28,5 kg	22/ 27 kg	25/26 kg	€ 1,52	Weaker
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