What happened this week: As expected we had to go through another quiet week of trading. With most of the trade busy to find agreements with the butchers about the market trend and abattoir prices selling was not in the focus of interest. In addition are most players waiting for the results and impressions which might be offered from the Bologna leather Fair next week. This event is still the best indicator for fashion, articles and not to forget offering a decent inside into the situation of the European tanning industry. In the combination with Shanghai about six weeks ago the round up of important leather fairs is done by then and it is traditionally the start of the  of the winter production cycle. Although there were few more bad news circulating the market gossip also this week, such as cancellations of credit insurances on a major tanning group in Italy (already in the limelight for some time), further problems for UK and Irish suppliers to move enough product and the continuing volatility in the currency markets – to name few – there is rising hope, that the market might be in the final lap of the correction phase and could settle eventually when the dust of Bologna has finally settled. There might be still a number of obstacles on the way

which could cause a still few ‘accidents’, but there is certainly realistic hope for some light in the far distance of the end of the tunnel. Leather business is still not showing any signs of slow downs and the price reductions for raw materials are starting to reach levels where they are fairly compensating for the margin problems a great part of the leather industry was dealing with. The currency situation has certainly also changed the equation vs. a year ago, but all in all things looks much better today than six months ago. There are still a few imbalances to deal with in the market, but the majority of the trading levels and physical balances of material look better than a while ago. Considering, that we are now starting the winter semester one can start to prepare for the end of the mental depression large parts of the trade have been tackled with. Trading during the weeks still light, but mainly due to the fact, that buyers are still in bargain hunting mood and many of the bids which came in were immediately turned down as they were far below market levels and who doesnt believe in a market crash couldn’t take them. However, one cant blame the buyers, because there is indeed a large price gap between offers and markets what must still leave the impression, that ‘anything goes.’

So, the few trades concluded were close to asking levels and the vast majority of bids and interest was turned down due to the low ideas buyers had in mind. We don’t however exclude, that they were successful next door, because market opinions and individual positions are certainly not the same with everyone and everywhere. Live was again much easier for dairy cows and low grades while due to the price competition from the UK , Ireland , France and the US steers and ox/heifers had a much more difficult time. The kill: The kill was getting a bit better this week, but still nothing to celebrate. Productions are just about to meet the weekly requirements and not much of a weekly surplus is building. The slaughter should continue to move moderately higher.  What do we expect:  By the end of the next week we should know more. The fair in Bologna will certainly not be easy, because  market opinions could not drift further apart. Buyers will do anything during the show to depress raw material suppliers trying to push buying prices for the start of the season further down. Lets see how strong the defence line is going to be. We expect mixed results within the grades and the corresponding reflection in prices now. Some will still suffer, others might be close to the ground.