U.S. Surface Imports 2015: More than One Number
By Emerson Schwartzkopf
Let’s get the bad news out of the way first: Annual granite imports to the United States declined in 2015 for the first time in five years.
Now the good news: Other major surface sectors showed healthy annual gains, with quartz surfaces booming by more than 50%.
Plus, given the current economies in exporting countries, granite’s decline looks like more of an adjustment than a harbinger of bad times ahead.
The exclusive Stone Update analysis of data from the U.S. International Trade Commission showed a robust 2015 overall for imported dimensional surfaces. There are a few areas that need close watching this year – mainly Brazil and China – but nothing indicates major problems in dimensional demand and use. (Not yet, anyway.)
GRANITE
Ask the question what happened to granite last year, and there’s a one-word answer: Brazil. What the numbers indicate for this year isn’t as clear.
In 2015, Brazil’s exports of worked (cut, sawn, one side polished) granite dropped nearly 25% from the previous year. Normally, this would bring out the doom-and-gloom crowd to show how the decorative granite market is once again going in the tank, and the industry’s been living under false hope for the last few years.
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Don’t call the auction house yet to start the liquidation sale. If there’s anything out of whack here, it’s not with the U.S. side of the business; it’s in the economies outside our borders.
Stone Update’s analysis rarely looks at the customs value attached to imports; as a giant consumer of granite, it’s better to judge the U.S. market by the volume of stone crosses the ports-of-entry. The declared customs value gives a good indication of what the exporting companies are getting for their materials.
Customs value doesn’t equate to the selling price – several levels of distribution have a hand in markup before a slab enters a fabricator’s backshop – but it does offer a snapshot. And, with Brazil, it’s a telling picture.
By dividing customs value by volume, the value-per-ton (VPT) gives a comparable figure as to what a country’s overall stone exports are worth. Some countries, such as Italy, often show a much-higher price, as it’s a net granite importer of raw granite and processes top-level and exotic stone.
The value-per-ton chart for worked granite from 2013 through 2015 tells the story in the first line. The average VPT for Brazilian granite in 2014 – the same year the country shipped more than 1.1 million tons of the stone to the United States – hit $584.10, or 30.1% less than 2013. Last year, the VPT for Brazilian granite averaged $758.40 – a one-year boomerang rise of 29.8% from 2014.
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Brazil’s 2014 granite exports to the United States didn’t signal a huge boom in our market. Instead, it showed a country shipping an extraordinary amount of goods at a large discount to bring in U.S. cash.
And, with good reason. Brazil’s economy is going through a huge recession, and it’s standard business practice to meet short-term needs by selling off inventory at, at times, fire-sale prices. The 2014 bump for Brazil – and, to some degree, for China and Italy – came mainly as a way to fuel struggling economies, and not necessarily from increased U.S. demand.
The 12.7% decline in granite tonnage imported into the United States last year indicated a market returning to a normal level after a one-year binge on cheaper goods. Import data available in mid-summer will show if granite is again on a steady course, or if there are problems ahead.
MARBLE
If one theme predominated about hard surfaces in 2015, it was that Marble Is In. The import data, when it comes to worked marble, provides ample evidence.
The 443,363 metric tons sent to the United States last year easily beat 2014’s record shipments by 37.1%. It’s been a fast rise for marble; 2015’s import total is more than double the amount received in 2012.
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The quick growth overall is mirrored by the strength of the new leader in U.S. supply: Turkey. After spending much of the last decade in annual shipments hovering near 20,000 metric tons, the country all but doubled its flow every year since 2012. Last year’s 136,796 metric tons represented an 85.2% year-to-year growth, although shipments tended to flatten out last fall.
Italy, the usual king of U.S. marble, proved to be no slouch last year. While the 116,227 metric tons shipped last year amounted to only a 14.3% increase, Italy continues a strong rebound in the marble market from its low points in the Great Recession.
Only one major exporter to the United States showed a downturn last year, as Spain dropped 12.4% from 2014. Troubles in the Middle East also severely hampered or shut down longtime smaller-scale exporters such as Lebanon, Israel, the Palestinian Territories, Syria and the Gaza Strip.
The marble market, along with its calcareous cousin travertine, will change in the next few years when another country appears on the list: Iran. It’s still unclear how the lifting of trade sanctions, beginning last year, will affect marble and travertine this year, Tonnage flow may not change significantly, but amounts per country will fluctuate as less stone from Iran is likely to be shipped raw to other countries for processing, and sent directly to the United States with value-added cutting and preparation.
QUARTZ
Surely, after last year’s ramping-up of two U.S. quartz-surfaces plants (LG and Caesarstone) and adding more production at another domestic producer (Cambria), imports of the material couldn’t, just couldn’t, reach the 42.6 million ft² level of 2014.
Yet the import figure for 2015 hit that level – somewhere, we can guess, around Labor Day last September.
Quartz-surface imports finished 2015 at 66.1 million ft², rising 55.1% from 2014. Of the countries exporting more than 1 million ft² in 2015, only one failed to register a double-digit growth rate from the previous year.
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Much of that overall growth comes from China, where quartz-surface shipment to the United States went into high gear last year. The 21 million ft² sent here – nearly one-third of all quartz-surface imports – accounted for a 136.5% increase from 2014, and made China the largest quartz-surface foreign supplier.
By comparison, longtime leader Spain boosted its 2015 imports to 13.1 million ft² … but even with a 21.4% year-to-year growth, it placed a distant second. Israel notched third with 11 million ft², while Canada placed fourth with 5.5 million ft² (+11.8% from 2014).
Israel’s position came with the slowest year-to-year import growth among quartz-surface importers: a paltry 0.9%. Monthly import data tended to show Israeli imports leveling off through the second half of the year, as Caesarstone increased domestic production at its new Richmond Hill, Ga., plant
China’s surge marks a change in the U.S. quartz-surface market. The tight control on product from factory to fabrication to installation by the major brand names now faces competition from Chinese suppliers selling material with no restrictions on anything; territories, pricing and other limiting factors are going to be less-important.
TRAVERTINE
As travertine exports from Turkey go, so goes the U.S. import market for the stone. Last year, Turkey’s shipments – and the U.S. market – was good.
The 738,331 metric tons of travertine worldwide shipped to the United States is far from the near-1-million metric tons received in 2006 before the Great Recession, but it’s still growing from the sub-500K metric-ton levels of 2009-2010. Last year’s total represented a 9% climb from 2014.
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The biggest trend in U.S. travertine is less in use or price; the largest change is in supply. Turkey always shipped more than any other country, but the dominance of the U.S. market keeps getting larger.
Overwhelming isn’t quite the term for what’s happened in the past dozen years. In 2004, Turkey accounted for 68.7% of all U.S. travertine imports. In 2006, the high-water mark for travertine, Turkey’s share rose to 72.2%, and barely changed (72.6%) in the low-tide year of 2009.
Since then, Turkey’s moved closer to cornering the market. Last year, the country sent 625,937 metric tons to the United States, or 84.8% of all travertine shipped here.
The only challenge to Turkey’s dominance may come with Iran shipping more finished material worldwide, including the United States. Given than Iran’s ranking for international stone production has been as high as #4 in a previously limited market, changes could be in the offing.
OTHER CALCAREOUS
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OTHER STONE
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