The Competitive environment in 2019

During 2019 we can expect to see:

A further increase in supply of big format porcelain slabs in the market as more production lines come into the market. New porcelain factories are also expected to come up in Eastern Europe, Middle East, and elsewhere.

Some Spanish and Italian companies are spending huge amounts in marketing to create their own brand and are systematically strengthening their logistics infrastructure throughout the value chain as they enter new markets. But not every company will succeed in this effort, and with so many players one should expect a commoditizing of ceramics and a very sharp decline in prices in 2019. Most observers of the ceramic industry agree there is going to be a huge mismatch between supply and demand, there simply is not so much demand for the amount of production that exists and is expected. Will the porcelain companies set up their own stockyards and train installers in attractive markets, bypassing the existing infrastructure of wholesalers and fabricators?

Most likely this start happening in 2019 in a big way.

The tariffs on Chinese quartz by the USA, if the trade wars continue in 2019, means that many Chinese factories, unable to compete with much high prices, will close down. But it also means they will be aggressively pushing their materials in rest of the world markets, with

Chinese quartz prices, already low, going down to throw away levels. This could mean quartz may frequently replace even very low priced stone in the price sensitive markets.

Those people who had assumed that artificial stone was too expensive in their market segment and was thus not be a competitor for them, will get a big shock.

The massive US$ 500 million market in USA at customs prices, that was occupied by Chinese quartz, is now up for grabs if the high tariffs are not removed by the

US government. (The Americans seem to think the custom duties will stay). Who will occupy this huge new space and opportunity ? Some of it will be eagerly taken up by quartz manufacturers from USA and from factories in other countries.

New production lines are coming up in USA and also some new quartz factories in countries like India. But some of this space will also be taken up by the porcelain companies.

Natural stone exporters with a consolidated presence in USA are also hopeful of at least a modest increase in demand for their granite and marble slabs. Will the wholesalers and fabricators, in USA and elsewhere, finding it difficult to do business in such an extremely volatile situation of changing prices and new logistic competitors, decide to once again to return to pushing natural stone, which they know best ?

That is a distinct possibility and one of the most interesting aspects to keep an eye on.