What happened this week: After several weeks of slower hide sales, we finally saw a substantial rebound in activity. The round of buying we hoped for in our last week’s report occurred in the second half of the week when a good number of hides were sold.

In Europe business was concentrated on the renewal of existing contracts while Asian business was available for dairy cows and some heifers and even bulls. Some harder negotiations were necessary to arrive at levels where sales could be concluded and even with prices still not being fully sufficient, levels were at least somewhat better than we could reasonably have expected.

Sales for summer shipments are always appreciated, especially as this year holidays in the European tanning industry are more concentrated than previous, interrupting the product flow more. There are also more tanners who have decided to shut  down completely for the holidays and who are not even engaging in contract production to maintain a minimum level of soakings. Consequently, additional hides need curing and these are becoming available for overseas export. The biggest boost however, came from the competing markets, in particular the USA where the market keeps showing strong signs of stability.

It seems also that there is some need from Asian tanners to buy for July/August shipment, even if these are not available in all grades and with regard to  dairy cows. However, prices will still have to remain on a competitive level for the sales to be finalised.

Unfortunately the dollar was of no great assistance this week.  Fluctuations were very limited and really attractive levels to cover sales were nowhere near reached. An interesting development was that one of our colleges is going to close its wet blue production later this year. This shows how difficult production in Germany has become and is further evidence of the erosion of tanning capacity in central Europe. It does not take much foresight to predict that this process is not yet finished. A troubled German furniture factory also closed. Apart from that, leather demand remains reasonable, even with the existing problem of price pressure. This is confirmed by all available company reports and results. As a result, demand for raw material remains steady and sufficient within the established price frame.

Also during the week, South German abattoir prices were fixed for the next three months. Prices for cows were up by a decent figure as bull prices climbed mildly vs. three month ago, something that is unlikely to make buyers’ lives any easier. The kill: The kill corrected sharply on the downside. This was not a great surprise with the approach of the holiday season.  All the signs are that kills will stay low, reaching their lowest point during the first half of August.  What do we expect? The concerns which we felt in previous weeks were at least momentarily lifted. The sales, the emerging solid interest and lower kills protected the market from  downside risk. We doubt that prices will have more than moderate upside potential and expect interest to dry up quickly when asking levels are pushed too far. However, the sentiment is a bit better.

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	Steady
	25/29,5 kg	27,5/28,5 kg	22/27 kg	25/26 kg	€ 1,37	Steady
Dairy cows	15/24,5 kg	22,5/23,5 kg	13/22 kg	20/21 kg	€ 1,50	Steady
	25/29,5 kg	27,5/28,5 kg	22/27 kg	25/26 kg	€ 1,36	Steady
	30/+      kg	33,5/35,5 kg	27/+   kg	29/31 kg	€ 1,23	Steady
Bulls	25/29,5 kg	27,5/28,5 kg	22/ 27 kg	25/26 kg	€ 1,52	Steady
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