What happened this week: Market activity has stayed at reasonably low levels, but is driven more by supply than demand. This week we also saw a reasonable number of inquiries for the standard grades with shipping requests within the next four to six weeks. This can hardly be met as most of these grades are already well covered and the low kill is not generating any additional quantities for sale. This situation applies mainly for the Asian markets and the grades between 20-35 kg. Once again there was less activity in Europe.

The top names are running at good levels and are only complaining about insufficient margins while the more standard tanneries have obviously slowed down due to a lack of orders and profitability, particularly in the upholstery segment. More and more complaints are also being expressed about the weakening $ which is hitting a large sector of the industry as a result of the large number of leather and leather products exported. We are getting closer to the long time lows of $1.36 against the € and this will certainly affect the hide and leather market. So long as the other raw material markets were rising in relation to the $’s descent it had very limited effect on prices, but since the US market has not advanced much recently, the cap on € prices can be sensed and, consequently, every cent the € gains has to be absorbed in prices. However, it seems this is only affecting a limited number of suppliers because, at the abattoir door, hardly any of these changes can be felt and some are still willing to bet on the market’s driving supply forces and obviously expect rising prices in the future.

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