What happened this week: The entire interest this week focused on the meeting of the trade in Shanghai. Despite the very high turnout and the fact that the fair is a largely important event, which might soon overtake APLF in Hong Kong, it has been proven again that its timing is missed, as it is too early to gauge the volume and prices of the leather business in the last quarter. In addition, the fair focuses on upholstery leathers leaving the section of shoe leathers underrepresented. The event has shown that demand for upholstery leathers remains fairly strong and consistent. Very few tanners spoken to expressed dissatisfaction with the volume of orders expected from their customers over the next months. The problem remains in the price of finished leather and in the increasing overcapacity of production of Chinese tanneries. It continues to weigh heavily on the ability of other tanners to negotiate leather prices with their buyers, which are desperately needed to justify present raw material prices. This was the reason why only limited business for raw material was concluded.  Without a clear indication of the outcome of negotiations on finished leather prices, no buyer was willing to place more than friendly orders to maintain a relationship. Price bids were about $1 to $2 below asking levels and deals were concluded only where the customer/buyer relation was good enough to justify the sale. As a result, the total volume of raw material sales remained below expectations. The dollar was trading in the range we have been seeing for some time now. It was on the low side until the end of Friday when it returned to the levels from the previous week. Those able to hold their position had the chance to improve their revenues in euros before Friday closed. Bad news came from the automotive industry, however. China and the USA have both been reporting poor sales of cars in the last weeks and the media were full of reports about the existing overcapacity in the industry. In the logic of the car industry this translated into further pressure on the suppliers and prices. Since automotive leather has long been the major driving force behind raw material fluctuations, this puts a further question mark on future directions. Yet, having said that, raw material prices do not always follow the logic of finished product developments. The conclusion of the week has to be that we are not concerned about the demand for raw material for the rest of the year but price negotiations will become probably even more difficult in the near future. The kill: The kill continues to improve and we sincerely hope that weights will do the same. This would give a little bit of relief to calculations, as abattoir prices are far too high against the selling prices in the market at present. What do we expect? We continue to fail to find any reason why raw material prices should leave the existing trading range that we have seen for the last three months. Currency factors and financial issues will remain more decisive than anything else in the weeks to come.