The climax was reached during the Hong Kong fair in early April. The APLF was in fact one of the most important and most visited in recent years, with key players from all over the world attending. Asian buyers attended in large numbers, not only from China but there was also a large presence of Japanese and South Koreans. During the APLF, split prices reached levels never seen before and the market witnessed all-time record highs. 

After the APLF, darkness fell and everything started to change. Disputes, containers blocked in ports, delays in opening letters of credit. Suddenly the machine, which is the Asian continent, misfired as it ran out of fuel. To exacerbate the situation, problems started occurring with Chinese customs, with entire ports blocked and several hide traders and tanners arrested or even held in prison. 

The truth is that the issues facing Chinese customs are not related to splits, but to raw salted hides. However, this fact has been used and exploited by buyers to leverage against the suppliers or as an excuse to cancel contracts booked at higher prices. Basically a storm in the market is brewing, the wind is blowing but it has not started raining yet. Prices for splits have not dropped significantly yet, even though demand seems to be reducing. 

The situation in Europe at the moment is completely different and demand for splits tends to remain very good. The month of April was on the whole a quiet one due to the many festivities and holidays but there was still a good quantity of work. The suede market is in the middle of its high season (although at lower levels compared to recent years), as are other sectors, from leather goods to furniture. This implies a stabilising of prices, which would be good, but an upward trend may still be seen for the highest quality selections. 

In general, at a global level, the split offer tends to remain poor. The thing that changed the game in April compared to the previous quarter was lower overall demand. The month of May will be very important; it may confirm an underlying weakness in the split segment, or confirm the stable market of the first quarter and remove the threat of a heavy correction in the market. 

Raw material prices continue to stay very high and during March there was a new surge at even higher levels, which were difficult to maintain during the month of April. The instability in Asia, particularly China, has slowed or reversed the price rises in April, with price levels generally lower than those of the previous month. 

The Split Report is written and produced by Leather Insiders.