To understand today’s situation better it is necessary to go back around one and a half years to the end of 2008 when the general crisis started. At that time price reductions of nearly all sizes colors and origins of bristles in China were witnessed, most prominently reflected in sizes of 83 mm up. This has led to a reduction of production capacity in China during 2009. To be clear, the capacity of boiling and dressing facilities has not been reduced, rather it is the collection of raw hair that has. Prices were simply not interesting anymore.

To give you some background information, one has to be aware that the raw hair is still collected by thousands of collectors who travel on their own expenses to the farm houses and small slaughter houses. From here the materials are passed to the next steps in the production line; to the so-called semi-dressers and small workshops that wash, sort, boil for the first time and prepare the hair for the big factories. Those big factories in turn are boiling for the second time and dressing goods to export level.

Due to the reduced raw material prices, less people stayed in this very low paid collection business. At the end of 2009, when most of the raw hair stocks had been used up, not only the demand but also the prices started to rise. This trend was quickly underlined by those who are speculating on higher prices. Clearly this drove the price up further still.

Since the beginning of 2010 the demand in Europe seems to have stabilised and even slightly increased. Also demand in mainland China and Indonesia from the paintbrush producers went up and drove the price further up.

As an example see the development of a few items in the following graph.

This development, coupled with the further increase of the US Dollar against the Euro (which increased around 10% over the last five months), is responsible for the high Euro prices of bristles today.

Contd Page 2