What happened last week: Activity last week focused entirely on the APLF fair in Hong Kong and, although many claimed it was not worth a visit, almost everybody attended. There are always assumptions regarding business and attendance and many are likely to complain about the show and its results. Attendance was actually fairly high during the first two days but dropped sharply on Friday. A general statement regarding fair results would not be appropriate as it would narrow the focus on individual segments. As far as we are concerned we were positively impressed by the shoe presence and what leather-goods tanners delivered. Leather orders remain strong and manufacturers are busy. This may not come as a surprise but it proves that order books are nicely filled and nothing suggests this is a short-lived trend.

This is further reinforced by the numerous confirmations that a number of upholstery tanners, in particular in China, are considering returning or changing to shoe leather production. It is also true that, despite the decent demand, prices are still an issue. This was reflected by the fact that most of the interest for raw material was among lower priced items, with the exception for top quality light weights. As a result, most sales generated during the fair were in this segment causing another good clearance of products that for a long time proved very difficult.

The upholstery business remains in a more critical condition. Strong pressure on finished leather prices disqualifies European dairy cows in the mainstream production, consequently limiting the potential customer base. Only a reduced number of tanneries serving the limited medium segment are still willing or in the position to use dairy cows. The cow market is therefore not as good as it may sound. Some interest came from the Italian side although tanners tried to take advantage of the situation and bid the market down. Eventually one was able to limit the price reductions to a fraction but we doubt enough sales were generated to remove all the pressure from the market. The furniture show in North Carolina this week might give tanners more belief in their order books and we are still hopeful for some follow-up business.

Garment tanners were, however, a complete disappointment. Neither Korean nor Chinese tanners had any good news to report on nor did they have particularly interested buyers. To draw some kind of a conclusion, the result of the show was better than expected but did not bring the volume of interest needed currently in the cow market.

The kill: Still fails to return to the required levels. While the low numbers of cows are not worrying, the low kill of bulls remains a problem despite the fact it cannot yet be converted into a significant price increase. The kill should improve slightly but will not generate too much hope in the short term. In a couple of weeks cows will return to the fields, which will not bolster the total numbers either.

What do we expect? This week it will become clear whether there is any follow-up business from Hong Kong. In addition, we have to wait for the final results on abattoir price negotiations. We still fail to see any reason why prices should change much. Bulls are supply driven, whilst cows will need more support to hold their levels into the spring season.

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	€ 1.50	Steady
	25/29.5 kg	27.5/28.5 kg	22/27 kg	25/26 kg	€ 1.33	Steady
Dairy cows	15/24.5 kg	22.5/23.5 kg	13/22 kg	20/21 kg	€ 1.45	Difficult
	25/29.5 kg	27.5/28.5 kg	22/27 kg	25/26 kg	€ 1.28	Difficult
	30/+      kg	33.5/35.5 kg	27/+   kg	29/31 kg	€ 1.18	Steady
Bulls	25/29.5 kg	27.5/28.5 kg	22/ 27 kg	25/26 kg	€ 1.52	Steady
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