What happened this week: The week was pretty much divided into two parts. Until Thursday the lacklustre trend continued and very little activity was noticed – as well from Asia as well as from Europe. By Thursday morning things changed quickly and activity increased sharply. The main interest came again from the Orient and during Thursday and Friday satisfying sales were concluded. Even some minor European interest was noticed and turned into business. Beside the better interest for hides we remain impressed by the volume of Letter of Credits. Beside of all the talks about sales and activity we consider this to be the real and most reliable indicator, that leather business cant be too bad and tanners are active. In part however, it is also the result of the shift of interest after the BSE case in the USA. Europe has definitely got its share and Asian buyers entered the market as well as for security, but also to prevent the US market to go through the roof. At the end it worked and with declining US prices as a result,  the massive price gap between the market is now closing to more realistic levels.

Our concern about the kill was not justified. While in bulls we are just about steady on the normal seasonal and lower levels has the kill in cows again picked up, after the slump seen two weeks ago. This is pretty good, because it keeps the market under control, although it did not help us at all in the buying at the abattoirs for February where prices stayed unchanged where they should have come down – at least in bulls. Margins in males remain consequently insufficient in males. Our new Chinese colleague from Holland has started activities and is buying resp. trying to buy from the old sources of van Buren all over Europe. At least one can be suspicious about the conformities between the old and the new and this might be worrying about the past and for the future. Hopefully authorities take better care this time to prevent from bad surprises. However, we welcome the new competitor for a fair competition. Prices for hides are bouncing all over. Buyers are trying to take the chance to bid down and to find sellers who – for whatever reason – are willing to accept bids. This has led to a huge discrepancy between the highs and lows spread around the market place.

As usual in such a market environment quotations are more driven by the individual interest rather than a reflection of buying and selling. With the general low activity over the last weeks and a decent sold position of reputable sellers the large gap between bid and ask can be easily explained. In any case price at the end where quite steady with dairy cows continue to ease a bit from the highs seen some weeks ago.   The kill: At the moment the kill is better. At least on cows and this has lifted a lot of our concerns about the supply side. So, supply at these levels will be good enough to match demand at we hope that this is going to continue. However, some declines in the second half of the month have to be considered. What do we expect?: As boring as it might be, but we cant see any forces which could drive the market strongly either side. Agreed, that there might one or the other bargain available, but the fundamentals are in shape for a continuation of the range trading we see now already for quite a long time. Global leather business is good and Europe is burdened by the currency and structural changes. Compensation of effects and for the moment  the forces remain in equilibrium – at least in our opinion.