What happened this week: Things were a bit slower this week. Sales continued to be acceptable in males, while females were quiet. The dominating markets for cows (Italy and Korea) were absent this week and many Italian tanners seem to have extended their holidays. The news that a Belgium hide processor and trader went out of business has in the meantime spread around the globe and also burdened the mood. This has confirmed our suspicion, that things in the hide and leather business are not too good and cash-flow problems will arrive sooner or later. We would not be surprised if we would see more of them to come not only in the hide business but also in the tanning industry. Further bad news also from the USA where one of the biggest tanneries has decided to close their finishing operations. So there is not too much side leather production left. The restructuring of the business is traditionally effected in the period of weak markets and this is

happening also again now. Although it has been reported some times in the past weeks we can now finally see in the retrospective that the hype of the first months of the year was unjustified and not covered by additional demand for finished products. So the pipeline had been filled up without having enough outflow at the end. This garnished with some speculation and we got what we had. Over the summer months we had the traffic jam and now we are waiting for the normal flow again. Presently we would still consider that it is still too early to make final judgments. Seasonal productions such as upholstery leathers are not yet back and we need better information about after summer retail demand to really decide on how good or bad the coming months will be. The only bright spots which can be seen are better demands for consumer products in the Eastern bloc, namely Russia and the further gains of market share for European car

manufacturers. For the other products the general economical outlook is neither especially good nor bad. It seems just that the expectations of many have been or are too high. The kill:  Slightly lower than in the past weeks, but we have no explanation for this. What do we expect? With the bankruptcy here and the bad news from the USA the friendly tone has disappeared again. Concerns are mounting . Fear and concerns are never positive for a short term market trend. Next week we will fix the abattoir prices again and that will give us some directions. Basically we have also for next week little reason why our market should move in either direction. There is still no excessive imbalance to be seen in supply and demand, but we need now quickly signals for the following weeks. Butchers believe that hide prices have fallen too much while the leather family would appreciate steady markets for some time to regain confidence in the market place – and this is precisely what also we would like to see.