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With the end of this week, the first half of 2022 comes to an end. Although this means nothing special in terms of both timing and content, it is still magical at times like these to pause for a moment to consider what has happened and what we might expect for the second half of the year. There is no doubt that, overall, the year began with cautious optimism and this was reflected in the rising prices of cattle hides. Even though the pandemic was always a source of new surprises everywhere, the overall assumption was that social and economic life would be less restricted and return to normal. Many also sat back comfortably and hoped that the general feel-good phase with low interest rates, low inflation and further increases in global growth would never come to an end. As is so often the case, sometimes it takes the external shock to put everything to the test. This time it was the invasion of Ukraine that made many things that were already visible on the horizon very quickly become reality for everyone. For the hide market, this meant that even with the invasion of Ukraine, the air and optimism escaped from the system. In the case of Europe, it simply took too long for all those involved to realise the realities and, above all, to understand that in other regions of the world, slaughtering was extremely high and there was a greater willingness to secure sales through price concessions. If one also considers that, at least in Germany, slaughtering was more than 10% lower than in the previous year, then one may become fully aware of the complete situation and the real balance between supply and demand. The fact is that this meant that the sales of raw material in the second quarter were never really sufficient and that the price adjustment, especially at the slaughterhouses, could not ensure a secure global marketing of all the hides produced. It is always overlooked that as long as not until every hide is sold is the real average revenue known and that in such times it is not very useful to orientate oneself on the partial sales of production and consider

them as the price reference. In this way, the fundamental problem of insufficient leather demand is only ever pushed in front of oneself. After the slight improvement in the sales situation last week, the general calm and restraint caught up with us again this week. It is not particularly surprising at this time of year, but the outlook for the next two months at least does not remain particularly positive. Fortunately, at least the kill remains very low at the moment. However, it can be assumed that the live animals will be available and the backlog will have to be made up at some point, because at least the fattening cattle cannot be held back forever. Drought in Italy, relatively high stocks talked about by many tanners and the approaching holiday season are not expected to stimulate demand in Europe in the next eight weeks either. In China, you never know what will happen next. On the one hand, there is talk of massive efforts by the government to revive the economy after the lockdowns, but on the other hand, direct contacts with customers paint a clearly pessimistic picture. However, sometimes it takes very little in China to turn the mood around and often the raw material market does not necessarily have anything directly to do with the leather business. However, that is the only hope for the coming weeks, as the factual situation and both, exisiting physical stocks and demand do not suggest a sudden recovery and activity in the world’s largest market at the moment. This week’s sales have thus once again rippled along and are limited either to coincidences, niches and specialities.