Italy continues to have an excellent turnover in the ceramics market. Spain is growing, Chinese Export collapse especially in the USA.
With 2020 off to a good start, between March and April, the Italian tile industry lost 350 million euros, out of an annual turnover of 5.34 billion.
Between April and May, after more or less long lockdowns, the ceramic industry gradually spread out to almost every part of the globe, but for ceramic manufacturers and suppliers of technology, raw materials and glazes the price to pay was very high.
Data from Europe
The 279 Italian ceramic companies are now working at 50% of their production capacity and are counting on a 2019 closed below expectations.
In 2019, total turnover remained substantially stable compared to the previous year (-0.7%) at 6.5 billion euros (407 million square meters), of which 4.8 billion (325 million square meters) of exports and 1.7 billion (84 million square meters) on the domestic market.
Investments, an important indicator of entrepreneurs' confidence, are at €373 million (7% of global turnover), down from the previous year, when tax incentives were still in force, but at levels well above the pre-"Industry 4.0 levels.
In Spain, in the ceramic district of Castellon, the association of tile manufacturers Ascer estimates a loss of turnover in April of around 160 million euros, 45% less than in April 2019.
The Spanish ceramic tile industry, on the other hand, closed 2019 with a turnover up 4% to 3,470 million euros. Both exports (+3%) and the domestic market (+8%) were good. Production fell to 503 million square meters (-5%).
There were also great fears in the Italian and Spanish colour factories, affected by the sharp drop in demand.
In Spain, turnover in April fell by 40% compared to the same month in 2019, marking -49% on the domestic market and -37% for exports. The month of May was worse than the already negative results at the end of April, falling, according to the trade association ANFFECC, by 43% over the same period of 2019. What is worrying is the activity aimed at foreign markets which, for the Spanish colour factories, accounts for over 70% of annual turnover.
More or less of the same order of magnitude is the drop in revenues recorded in April also by Italian colour factories, as confirmed by Claudio Casolari, Chairman of Federchimica-Ceramicolor.
What happens in the rest of the world
In the USA, where the first signs of weakness in the ceramic market were already evident in the first quarter of the year, there is likely to be a further deterioration in sales in the second and third quarters, as reported by Gianni Mattioli, chairman of the Tile Council of North America, also due to the negative forecasts for residential construction in 2020 by the National Association of Home Builders (NAHB), which indicates a possible fall of 5.3% to 1.23 million new construction sites.
Imports to the USA fell in the first quarter, China collapsed (-98%) due to duties and Mexico fell (-7%), while Italy (+3%) and Spain (+5%) held up well, however little affected by the Chinese collapse, which instead benefited countries with lower value-added materials production, such as Turkey (+20%) and Brazil (+20%) plus newcomers such as India (+400%), Vietnam and Malaysia.
Confirming the uninterrupted negative trend since 2014, in fact, 2019 was also a black year for Chinese tile exports. Export volumes fell from 854 million square metres in 2018 to 770.5 million in 2019, with a 9.8% contraction, significantly worse than the -5.9% recorded the year before.
Exports to Asia fell sharply to 477.6 million square metres (39 million square metres less since 2018, -7.6%).
The losses in volume are more contained in Latin America (75.5 million square meters, 3 less than 2018) and Oceania (31.8 million square meters, 4 less), as well as in Europe (EU and non-EU), where imports from China are now only about 20 million square meters.
Chinese exports to Africa are stable at 120 million square meters (-55% from the peaks of 2014).
Collapse in North America, (-43.9%), with exports down from 80.5 to 45.2 million square metres following the introduction of countervailing (in September) and anti-dumping (in November) duties on tiles imported from China. Moreover, as we have seen, in the first quarter of 2020 Chinese exports came to a complete standstill.
Bangladesh's growth
With GDP growth of over 7% in recent years, Bangladesh is among the fastest growing economies in the world.
New companies were born, today there are already 28, and in just 5 years, tile production has grown by 150%, reaching 119 million square meters at the end of 2018 (+19% on 2017 and +40% on 2016).
Among the major manufacturers in Bangladesh is DBL Ceramics, which boasts a fully automated plant, built with Italian technology. Its technological partners include Sacmi, System Ceramics, Tecnoferrari, Air Power, Cami.
