The tile industry hit by Covid-19

The tile industry hit by Covid-19

October 29, 2020 Article from Ceramic World Review no. 138

Just like other sectors, the global ceramic industry will have to deal with the severe consequences of this difficult, unpredictable and anomalous 2020. For the tile sector in particular, the crisis triggered by the health emergency has affected players the world over and comes on the back of a two-year period 2018-2019 in which world production and consumption had already begun to decline. The latest edition of the annual survey conducted by ACIMAC/MECS reveals a 7% loss over two years, with a further drop in 2019 in both output volumes (down 3.7% to 12.7 billion sqm) and consumption (12.4 billion sqm, -4%). This equates to a reduction of half a billion square meters in a year, or a billion square meters over the two-year period. Clearly the biggest losses were incurred by China, which following a 11% decline in 2018 suffered a further 8.7% fall last year. The concurrent growth in production in India and Brazil was insufficient to compensate for a loss of this magnitude. However, India was the real star of 2019 in terms of international trade. With its 360 million sqm of tile exports (a figure that has almost doubled in 3 years, capped by a 31% increase in 2019), it has become the third largest exporting country after China and Spain and its tiles are increasingly being chosen as an alternative to Chinese products, both in the USA and elsewhere.
The outlook for 2020 is very different. No country has been left unscathed by the pandemic, although it is still difficult to estimate its
real impact on global production systems. Despite this, the survey of the main producing countries and the largest world groups in the sector conducted by ACIMAC/MECS indicates that, assuming there are no further lockdowns, world tile production may experience a contraction of around 8.5% to approximately 11,600 million sqm. This is a more moderate decline than the far more negative forecasts made in May and is attributable to the strong business recovery from June onwards that has been confirmed by the majority of players.  China, which suffered a 5.8% decline in production in the first half of 2020, has fully resumed operations and expects to record a full-year contraction in production of less than 10%. Moreover, around a hundred new lines for the production of large slabs are scheduled to be installed across the country by December. Turkey aims to maintain the same volumes as in 2019. At the same time, other major producer countries are more pessimistic, with Brazil, Vietnam, Spain and Mexico all anticipating falls in national production of between 10% and 20%. As for individual companies, even the world’s largest groups are cautiously optimistic. Almost all are expecting the contraction in production and sales to be limited to between -1% and -10%, but some of them have their sights set on further growth.