Since the holidays, the weeks have dragged by. There are many interested groups who continue to try to paint a different picture in public than the one that is currently presented to the actual active entrepreneur in the business with hides and skins. The hard facts are starting to get the upper hand more and more and unfortunately these are not at all pleasing at the moment. The main problem in Europe is the availability and price of energy. For some, the cost of energy is already rising so fast and so sharply that they are not able to maintain their normal business operations. Every day you can see in the media one or more companies deciding either to shut down completely or to significantly reduce their operations. Many companies in all rationality can already calculate that they will definitely not be able to continue operating with the current energy prices in the coming year. What was pushed into the background by the holiday season in the last few months is now coming out again with all its might and reality. As the situation is developing both faster and more strongly than many expected, there is not much time to think about solutions other than government aid. How long and to what extent governments will continue to be able to take away all financial burdens from companies and citizens after the pandemic aid? Slowly, the optimism that many people were still demonstrating in recent weeks is beginning to wane. For a long time now, the usual theories about the market and business in the near future have no longer been discussed; instead, people have to deal more and more with how to cope with the possible crisis this winter. This also includes

observing the financial strength of its customers now in the wider supply chain. In China, business remains affected by the pandemic. Many regions continue to be burdened by pandemic-related closures, after the heat and drought had already affected production in recent months. From the furniture fair in Shanghai, one received really very dismal videos of the attendace and the activities in the exhibition halls. It is difficult to assess the outlook in China, if only knowing that next month the so important party congress will take place, which will have such a big influence on future political decisions and economic policy. At the moment, the dominant expectation is still that the government will do everything possible to continue to fully support the economy. Only the weeks after the party congress will show whether this will be enough to support the reeling real estate market. This week’s business went accordingly. The few low bids received from Asia were withdrawn – unless they were accepted immediately. It is actually not so much about the price, but more about whether the customer actually still needs the goods when they arrive. Business this week was again very quiet. Only the specialists and the producers of niche articles are planning normally and seem to be little affected by the current situation. Everyone else has already made their arrangements for September and it seems that everyone is now waiting for the trade fair in Milan to get a final picture of the market and their customers‘ decisions.

The kill

The kill continues to increase in line with expectations. The temperatures are slowly starting to drop, and we have had the first rain in our region in weeks. We therefore expect meat production to continue to increase in the coming weeks, which means that slaughter numbers will also continue to rise.

What do we expect

What can you expect from the market at the moment under the given circumstances? The supply is slowly increasing and of course the leather factories have to continue to supply their productions. But it is not to be expected under the given conditions at the moment that the industry will buy more than what is really necessary. One can only hope that the fair in Milan will not only trigger a change of mood, but that this will also be accompanied by a significant increase in demand for raw materials and leather orders at the same time. Until then, it does not seem that either side will move significantly and that this will lead to a significant change in the current price level. In the second half of the month, however, developments will then certainly become clearer, but we continue to see more risks than opportunities.