This week can confidently be described as a total loss in business.  The holiday week in China and the fact that the European customers  have already completed all their programs and it will take a few weeks until the renewal is due, meant that hardly any activity and movement took place. Of course, the individual trades for smaller quantities, specialties or short-term needs always remain, but this is by no means even remotely a representative quantity that would be sufficient for an overall assessment of the market development. So the situation actually remains unchanged and as we have seen it for many weeks. Officially, the prices do not change at all or only insignificantly, but in our view this only partially reflects the situation. Demand for leather is declining worldwide. This is by no means a situation that affects all markets to the same extent and therefore the individual market assessment may be correspondingly different. The only question then remains on which side of the market one wants or has to orient oneself. One thing seems certain in any case. The balance of supply and demand, which is balanced for the top qualities, becomes worse the further you climb down the stairs. Our luck remains that we move with our goods at least in the upper third of the staircase. As is well known, the automotive business plays an important role in our market. This week you could get a lot of new information about sales and registrations, as well as the market prospects from the media. Where, on the one hand, positive high production and sales for the summer months dominated, on the other hand, it must be conceded that this could not necessarily be seen in the are mainly those who

demand for hides then. This was stable, but one could speak of growth. At the same time, a situation is developing that no one had expected. On the one hand, the problems in the supply chains are easing and the automotive industry can increase its production again, but on the other hand, rising interest rates and inflation are causing buyers to postpone the purchase of a new vehicle. As a result, some experts expect that the situation on the car market could change from a lack of supply to a lack of demand. There are indeed many signs of this. Rising interest rates are known to weigh on  the real estate market too and this is reflected in the demand for furniture. This applies to almost all major markets that are China and Europe as well for the USA. For footwear and clothing, the end of the corona restrictions may triggered a certain revival, but the decline in demand due to inflation dampens this development again. The business this week was once again below average and that it is already remarkable for this time of year. One may excuse it in China by the holiday week, but we all know from the past that buyers in China do not let holiday weeks stop them from being active in the market  when it seems necessary or attractive. In addition, it seems to remain to be seen what decision the government will make to revive the Chinese economy. Despite all the negative factors, prices continue to move very little. Sellers don’t want to know much about the need to adjust prices to stimulate demand. The pressure is not enough yet, and for some the hope seems to be greater than the fear of risk, they may have to wait for a certain amount of time for appropriate sales.

The kill

There is also still very little movement in slaughterings. For the season, the numbers are lower than we would have expected, and the outlook and forecasts don’t suggest that much will change in the short term. How this will affect the compensation in the livestock market can only be estimated, but not really reliable predictions can be made. We maintain our expectation that with significantly colder temperatures, the kill will also increase noticeably.

What do we expect

By the next week, the Chinese should have returned from their holiday week. Sooner or later they will have to show up and in the next few weeks the Chinese New Year will already have an impact on business. With the extended shipping times, the time window in which the goods could then be shipped is approaching fast. In Europe , there is still some time left for the necessary renewals of the current delivery programs. However, in October it would actually be normal for the leather industry to become more active in raw material procurement. We are at the beginning of the production strong time and usually one tries – if possible – with raw material to secure oneself with foresight. However, at the moment there is no greater enthusiasm from any side, which would indicate a significant revival of business in the next week.