By Emerson Schwartzkopf

  Maybe, just maybe, the dimensional-stone roller coaster is finally cresting the incline, and the steady growth of imports will give way to some exciting ups-and-downs before settling down on a nice, flat track.
  The reality, in the first half of 2006: fat, fat chance.

  Stone imports – the best indication of the U.S. stone industry’s health – continue on a contrarian track from the country’s dull housing market and tepid economy. Whether it’s granite, marble, travertine, slate or any other variation, stone remains a strong presence at U.S. ports-of-entry and, eventually, the nation’s fabrication shops.
  The only problem on the horizon may be a by-product of a trade tiff between U.S. politicians and a country that’s an easy target in an election year. Some prices may go up as a result, but cost doesn’t seem to be a deterrent in today’s stone market.
 
MID-YEAR MUSINGS
 
Keeping a close eye on dimensional-stone imports is more than some kind of industry insider game. Unlike automotive manufacturing or corn growing, the stone trade offers almost no way to measure its output; an estimate on the volume or value of countertops produced every year is, at best, an educated guess.
  Import figures are virtually the only statistics that track the use of stone. And, with 80 percent or better of U.S. dimensional-stone production involving imported material, it’s a good indication of where the industry’s headed.
  In looking at last year’s final import numbers on stone (“A Touch of Caution,” April 2006 Stone Business), the final tallies looked very good, but just not quite as strong as previous years. After years of a steady boom in stone, it looked like the market just might ease up in 2006.
  The main hazard in counting up the slabs and guessing about the future is that those guesses can be off. And, if the trends of the first half of 2006 continue through the rest of the year, I can admit to being wrong six months ago about being cautious. And I’ll do it with pleasure.
  In a way, the cautious tone is borne out in the first half of 2006; the $1,561,172,420 of at-the-dock customs value of dimensional stone entering the United States represented a bit of a slowdown. The total accounted for an 18.7-percent growth in imports from first-half 2005; meanwhile, the growth rate from mid-year 2004 to 2005 increased by 27.3 percent.
  So, the growth rate isn’t as big, but plenty of industries would be ecstatic with an increase of 18 percent. And, the slight lag in growth comes with some of the smaller categories of imported stone; the $102.2 million of other calcareous stone showed an 8.5-percent drop, while slate’s $59 million represented “only” a 13.4-percent growth rate.
  Marble could also be seen as a laggard with its 13.5-percent increase in mid-year imports, although it’s hard to argue against a total of $264.6 million coming into the country.
  The big drivers in the first half of 2006 are – as seen in the last few years – travertine and granite. Travertine, marble’s closest kin in stone, moved closer to overtaking its calcareous cousin with its $259.2 million, posting an 18.7-percent overall rise from mid-year 2005.
  Granite, meanwhile, spent the first half of this year building its position as the king of dimensional stone. The customs value of granite brought into the United States in 1H 2006 is $732.4 million, representing a 26.4-percent increase from the same time last year.
  Add up all the value of stone imported into the country in the first half of 2006, and granite accounted for 46.9 -percent with its $734.2 million. Compare that to 1996, when all dimensional-stone imports for the entire year only came to $564.3 million.
  Is there anything to put the brakes on continued growth? Economists like to point to declining U.S. housing starts and soft real-estate sales in calling for a slowdown in the construction market, but stone isn’t likely to follow suit. Homeowners who end up staying put in their current digs usually consider remodeling, where stone use remains strong. And, stone’s continued affordability is a plus.
  Stone imports may slow from one important source – China – due to an ongoing political tussle involving the Chinese government’s policy of keeping the value of its national currency, the renminbi (or yuan), constant with the U.S. dollar. Controlling the value of the yuan makes Chinese goods affordable in the United States, which some politicians see as a detriment to U.S. industries.
  A move in the U.S. Congress to impose a 25-percent tariff on all Chinese goods gained enough steam to force China into increasing the value of the yuan. This would make anything from China – including stone – more expensive, and some Chinese stone vendors are now raising prices to compensate for a possible drop in U.S. orders. Whether this will lead to a decline in overall U.S. stone usage, or if materials from other countries would pick up the slack, remains to be seen.
 
GRANITE
 
Granite remains the driving force in U.S. dimensional stone. Through the first half of this year, it continues with tremendous growth in the amount imported into the country – both in dollar value and tonnage.
  The customs value of all dimensional granite entering the United States indicates that there’s no letting up with the stone’s power in the market. All of granite’s Big Four – Brazil, China, India and Italy – posted gains in the first half of 2006, compared with the same time last year.
  Not all of the Big Four grew their imports equally, however. China posted the largest gain – 53.9 percent – from the first half of last year, followed by granite import leader Brazil with 35.5 percent. India grew by a healthy 20.8 percent, while Italy’s gain looked somewhat marginal at 10.6 percent.
  “All” granite includes blocks, boulders and other rough forms of the stone; however, the importing of unworked forms of granite is declining. This will continue in the future, as countries such as Brazil work to curb exports of raw stone and capture the value of slabbed and tiled work for themselves.
  The order of granite importers remain the same with worked (slab and tile) stone. Brazil leads all countries with $241.3 million for 1H 2006, followed by Italy at $160 million, China at $141 million, and India at $110.5 million. The growth rate in imports for all four countries in worked granite is roughly the same as with all forms of the stone.
  Brazil also strengthened its lead in the amount of worked granite sent to the United States in the first half of the year with 447,890 metric tons. That’s an increase of 46.4 percent from the first half of 2005; Brazil’s current shipments give it 37.1 percent of the U.S. imported granite market.
  China’s large increase in 1H 2006 worked-granite imports – 51.8 percent – came to 232,452 metric tons, or a 19.3-percent share of U.S. imported granite. China still placed third behind India’s 263,600 metric tons; India, however, experienced a small 6.5-percent growth in granite-import tonnage from the first half of 2005. Italy’s 185,640 metric tons of worked-granite imports also showed a relatively slow growth in 1H 2006 of 7.8 percent.
  Italy remained the leader in value per imported metric ton of worked granite for the first half of this year at an average of $861.96; that’s 2.6-percent better than the $839.92 average for the first six months of 2005, but still lower than the $884.20 average of 1H 2004.
  China’s $606.60 average value per metric ton for the first six months of this year is up slightly from the $599.26 average for the same period last year. That still placed China second among the Big Four in on-the-docks value; that figure may go even higher as China adjusts the value of the yuan.
  The other members of granite importing’s Big Four, meanwhile, showed decreases in tonnage values for the first half of 2006. Brazil’s average of $538.79 is 7.2-percent lower than the value per metric ton in the first half of 2005. And, the $419.21 average from India for 1H 2006 showed a 3.1-percent drop from the same time last year.
 
MARBLE
 
The Chinese currency conundrum may affect U.S. granite imports for the rest of 2006, but there’s an area where the impact may be greater: marble. China made significant advances in the U.S. marble market in the first half of this year in import values and tonnage, and a revaluation of the yuan could slow growth in this sector.
  Italy remained the champion of all U.S. marble imports for the first six months of 2006, with its $95.1 million far outpacing Spain’s $41.8 million. Spain, however, hiked its imports by 15.9 percent from the same time last year, while Italy’s shipments grew by only 4.3 percent in value.
  China, meanwhile, made serious inroads in all marble imports, with its $36.8 million showing a 50.4-percent increase from the first half of 2005. Turkey’s $27.6 million, meanwhile, amounted to only a 5.7 percent increase. Mexico boosted its marble imports by 28.6 percent to $11.3 million, displacing Greece (at $10.1 million) for fifth place.
  The difference between raw imports vs. worked imports in marble is much greater than with granite; only 47.8 percent of marble entering the United States in the first half of 2006 is rated as worked slabs and tiles. However, the finished side of the marble import market is still dominated by Italy at $56.9 million, followed by Spain ($21.3 million), China ($13.9 million), Turkey ($7.6 million), Greece ($5.2 million) and Mexico ($3.5 million).
  The 44,055 metric tons of worked marble from Italy showed a healthy 20.1-percent gain from the first six months of 2005. Spain topped that growth rate with its 25,455 metric tons providing a 41.9-percent increase – but China made the biggest gain, with its 21,446 metric tons increasing its imports by 55.2 percent.
  China also scored well in value per average ton for worked marble, with an average of $650.35. That’s far below Italy’s $1,293.80 and Spain’s $837.26; whether price increases coming from currency changes will change China’s position as a value leader remains to be seen.
 
 
TRAVERTINE
 
It’s almost too easy to wrap up the U.S. travertine-import market in one word: Turkey.
  Since the United States separates travertine from marble in its import data – something that’s not done around the world – it’s easier to track Turkey’s impact on the market. As far as U.S. shipments, Turkey seems to be moving closer to cornering the market.
  The $162.5 million valuation of Turkish travertine imports in the first six months of this year represented a 19.3 increase from the same time last year. Mexico placed a distant second at $50.4 million, despite an increase of 30.5 percent from 1H 2005. Italy’s $22.2 million showed a 10.4-percent decrease, while Peru stayed in a solid fourth with $10.1 million, a 29.4-percent increase from first-half 2005.
  Turkey’s dominance continued in the actual amount of stone hitting U.S. ports, with its 338,033 metric tons in the first six months of this year outpacing the same period in 2005 by 17.3 percent. Mexico’s 59.2 metric tons accounted for a 26.6 percent increase; Peru jumped its travertine imports by 60.9 percent with 15.992 tons, while Italy’s 24,313 metric tons showed a 13.3-percent decrease.
  And then there’s China, where U.S. import data for the first half of 2006 showed 16,801 metric tons of travertine coming into the country. That’s a 750.3-percent increase from the same time last year, meaning that either Chinese exporters decided on a major battle with Turkey in the U.S. market, or there’s a statistical anomaly somewhere.
  Accepting the Chinese figures on travertine imports would change the lineup in average price per metric ton, with China’s $173.47 severely undercutting Turkey’s $480.99. Italy took top honors for first-half 2006 with an average $916.31 per metric ton, followed by Mexico’s $850.02. Peru, meanwhile, placed itself in the middle of the value scale with a per-ton average of $626.55.
 
 
OTHER STONES
 
The remainder of the imported dimensional stones – other calcareous (such as limestone and alabaster), slate and the catch-all “other” (encompassing sandstone and everything else) – is smaller and showed more stability in value and volume. Trends remained the same as seen at the end of 2005.
  In dimensional (non-roofing) slate, China and India continued a close competition for first place in the first half of this year, the Chinese came out on top with $23.9 million, barely topping India’s $23.6 million. Brazil trailed far behind at $5.1 million, followed by Italy at $3.5 million. China grew its share of slate imports from first-half 2005 by 28.9 percent, compared with India’s 11.7 percent.
  Other calcareous stone proved to be the mixed bag of stone imports, with Spain’s $20.8 million in this year’s first six months leading the field despite a 10.8 percent decline from first-half 2005. Second-place Italy took a 17.5-percent hit from the same time last year with first-half 2006’s $19.7 million. Israel, at $8.4 million, marked an 8.3 increase from last year’s first half, and Turkey’s $7.3 million showed a 10.1-percent rise.
  India led the way in other stone, with its first-half 2006 U.S. imports of $34.9 million showing a 47.9-percent rise from the same time last year. Brazil’s $33.9 million accounted for a 22.3-percent increase, while Italy’s $20 million marked a 10.1-percent decrease. Canada sent $16.6 million across the border; its 16.4-percent increase moved the U.S. neighbor to fourth.
 
 
Data for this article is derived from information reported by the U.S. Department of Commerce, the U.S. Treasury and the U.S. International Trade Commission. All analysis is made using comparable data. “Cut stone/slab” data excludes crude/roughly trimmed stone comprised of marble/travertine, granite or other categories where volume measurement is in cubic meters instead of metric tons. Marble/travertine crude/roughly trimmed stone data is not included in value summaries, since the two stones are not delineated in the Harmonized Tariff Schedule of the United States (2002) (Revision 2).