What happened this week: The avalanche rolled out this week. In the first half of the week was still determined by gossip, bargain hunting and panic. Towards the end of the week things settled more and more and many tanners realized that prices after the slump of the recent week(s) have become extremely attractive. With the weak EURO and the actual prices Central European hides have become one – if not the most attractive option. With tanners trying to push this market even lower the discussions for new sales were extremely long and complicated. They anticipate today what they think the market will be in 4-8 weeks and we work on what we feel is the present correct valuation of the hides. This created large gaps at the beginning but at the end we were able to find solutions and consequently we achieved one of the largest sales figure for the year. It became very clear that tanners on one hand suffer from the fact that their leather buyers in the present environment are not willing to decide on new purchases while tanners have to cover raw material needs for their productions after the holidays. So decisions were taken without the relative leather

covering contract. In any case tanners feel with today’s hide price quite comfortable and had the courage to buy. Sales were made into almost all directions. Even Asian buyers took the chance to book volumes in expectations of better leather business August/September and taking into consideration the tremendous price spread between European and American hides. In some grades prices have a spread of USD 10,00 per pcs. considering the quality and price ratio. These kinds of gaps never last very long and the normal market reaction is that the expensive is coming down and the cheap is going up to meet somewhere. Apart form trading many people were extremely busy to sort out the classical weak market problems. So far people are willing to admit and to talk about it, one hears plenty and all kind of horror stories about claims, non-opened L/C’s and delays in taking up documents or shipments. The trade never changes and some pay now back for what they did and shipped during the hot times in March/April. Everything balances out and a lot of stress could be avoided if general trading standards would   be followed. With all the

chaos of the past weeks it seems that everyone is now really happy to go on holidays.   The kill: This week it happened the expected. After Wednesday the kill almost collapsed. If this just due to the very hot weather or due to the start of the summer holidays we don’t know yet and has to be seen next week. In any case was the drop so sharp on males (abt. 40 %) that it endangered already the regular fresh hide supplies. We would not be surprised if the low kill continues   What do we expect? We are now more than sure that the market has reached the bottom. For the coming weeks we may see still some late-comers who also try to secure the present price level. With the lower kill and the present price levels combined with reasonable forward sales of several suppliers reductions can not be expected anymore. Due to the upcoming holidays the demand will also decline except eventual further interest from the Orient. Due to the attractive price levels which we have in Europe at present and the Asian preference for summer hides this could be a strong option for the coming weeks. In total we expect a narrow trading range, although now on a lower level than  forecasted some weeks ago.