What happened this week: Slowly but surely the market returns to the normal seasonal activity.  After a very quiet September, were selling was really a challenge and without the regular customer base the month could have been called a non-event, inquiries and sales volumes are starting to return to normal seasonal levels. Side leather tanners continue to be the front runners and sales of bulls and ox/heifers dominated also this weeks activity.  Positive was also the return of the Asian tanners where a reasonable amount of cows was sold.  This can not yet compensate for the missing sales of September, but it is at least a start.  Interesting is the fact, that the split credit seems to play a lesser role, because most of the interest came in for lighter weight cows which offer generally a better yield, but also a lower split credit.  In the end tanners were buying more price per piece, than anything else.  We did not have any final results from the fair in Highpoint, but various sources mention, that leather buyers in the USA have an interest to place finished leather orders

again in Italy and pull some of their business out of China again. It will be very interesting to follow this development at the meeting of the trade in Bologna the week after next, which will give us definitely more exact information.  In shoe leathers the trend to better quality upper leathers is becoming more and more evident.  Interest for medium or better quality raw materials is increasing and consequently benefiting our product range.  The better news from the market activity have not reflected in better prices.  Quite reverse the pressure on raw material prices remains and negotiations are tougher than ever before. Mainly the buyers for cowhides in Italy and Asia are trying to bid down and try to lower the raw material price levels to the absolute minimum at the beginning of the new production cycle and to cover as long as they can to protect their calculations.  This is the normal trading pattern at this time of the year. The automotive business is causing some worries  – at least in Europe. GM declared, that abt. 10.000 jobs in Germany will be cut. This has caused some

 immediate strikes. The labour dispute in Volkswagen is also not yet settled, what leaves also the risk for a strike open. In general car sales are anyway not satisfying and so the production of automotive leather is stuttering and this might still have influences on some of  the European hides eventually. Apart from the total volume of production one can see, more competition and the result of the shift of sourcing in this sector. The kill: Last week we were still quite positive, but this week all of a sudden the kill of bulls dropped sharply while the kill of cows continues on the seasonal patterns. Cattle prices are blamed for the present situation, but we think, this will only be temporary.   What do we expect? We have good reason to believe, that activity also next week will be reasonable. There is a certain need to replenish inventories and tanners like to cover. Prices will remain a battlefield, but it seems that the trading range remains still intact and we expect variations to be limited. An question mark is the situation in the auto industry and the consequences for the market.