What happened this week: The year continues to start slowly. Only by mid week activity increased and tanners found the time after having sorted out the paperwork after the long holiday to think about raw materials again. So, by Wednesday afternoon phone calls and mails started to come in with the request for prices and offers and on Friday sales resumed to normal. Interest came from all directions and for all type of hides. In particular low grades and dairy cows were the most desired items. Sales made were on full asking levels and a reasonable amount of orders was carried over for reply next week. One gets the impression, that the present price level is workable and profitable for most tanners and the serious customers also admitted, that for them the most important matter is, that prices stay now stable for the coming months.

Also this week is was still too early to obtain a real picture about the demand for leather and leather products. The German economy remains to be in the doldrums, but on a global basis demand seems to be reasonably stable. The first round of fairs during the week showed outside central Europe a fair amount of confidence, although the expected war in Iraq still creates a very cautious environment. Having said this, one can, however get the impression that many tanneries have already acted defensively in the last quarter of 2002 with the consequence, that seemingly raw material positions in many cases are lower that what they should be at this time of the year. Dispositions are probably even shorter than what they had already been before and customers are now after the holidays entering into a situation where they

have to decide. One thing is however sure, without  materials and decisions you cant keep a production running and more and more players realize, that without deciding you might loose more than with a wrong decision. The kill: Slowly recovering from the lows seen throughout the Season. Weather conditions and the general poor state of the economy weigh in the production and the expectations for a lower slaughter in Jan/Feb are now turning into reality.  What do we expect? For the coming week we expect stability with a firmer undertone. The weak $ keeps prices in € terms still under a certain control and refrains the market from major increases. However, the downward pressure is lifted and a safe bottom is created. The next week(s) will eventually show us if demand is strong enough already for the traditional seasonal rebound in the first quarter.