What happened this week: The market is settling further. It seems, that for the time being the correction phase has come to an end and the price structure between grades, weights and origins is finding slowly, but surely a proper order again. Although there was this week mainly holiday mood around the world  and general activity was slow sales did not come to a complete stop and demand remained in place. The first half of the week was very quiet, but from Wednesday onwards business gained slowly more momentum again. With the strong statistical export numbers from the USA released on Thursday even interest for bulls and ox/heifers from Asia was seen again. In the meantime most inquiries were again for dairy cows and low grades and with the USD leaving record levels it was certainly easier to find price agreements this week than the week before. Honestly spoken the price variations in the past weeks have been so minimal, that its actually not really worth to mention. However, with the general economical mood still being good around the globe some of the concerns about the future of the hide market have slowly faded. Most players gained confidence again as they were able to move the

vast majority productions also in the past weeks. Consequently has the risk level again substantially fallen and hardly anyone is actually burdened by substantial inventories  building risk potentials. The general consensus, that very limited market movements will also have to be expected for the near or medium term future is growing again. Tanners are probably not too happy about the news as they were hoping for more of a correction into the summer to help their margins and to have a better base for the new season to be started after the summer. From the European standpoint it is pretty hard to see any trigger in the coming weeks which could move it more than the normal micro fluctuations. So, the market directions will be much more driven by the overseas markets where things seem not to be as clear as in Europe . Or may be also just by the currency markets which presently have almost more influence on price movements than the market itself which is presently pretty much in balance and not strong enough to generate any major movements. This anyway what is discussed at the moment. While sellers count on insufficient stocks in the tanneries combined with steady leather demand are buyers using the

of their argument of economics why the market should move their way and both positions seem to paralyze each other as the market fundamentals of supply and demand do. Everything points into the direction, that the key movements are going top be triggered with the start of the production cycle in Asia somewhen in the next 4-6 weeks what will tell us also about the realities of tanners stock and their risk analysis about raw material prices in the second quarter. The kill: No fun with the holiday on Tuesday what is cutting the week by more than just a day. What is more concerning however, is the drop in weights what is always hitting calculations and eating into the regular supply of fresh material. At the end it is just another and repetitive cyclical May/June situation which is going to be forgotten later in year again. What do we expect: Without any ‘exogene shocks’ we think that the market has found a pretty solid base again and the amplitudes of price variations are getting very small. We fail to foresee any major change. From the supply side everybody is relaxed and so only a wave of purchasing interest would disturb the market balance at the moment. Even than it is questionable if this would actually push prices higher with the resistance seen.