Add It Your Way

Do I really need to ask which one you’d write? Or which one you’d want to read, or see published?

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Schwartzkopf

We’re not dealing in what-ifs, either. The latest data from the U.S. International Trade Commission (USITC) offer good evidence to go either way with a negative or positive article bolstered by cold, hard facts.

As for me, I’m picking the second headline. Sure, this is a trade journal, and good news makes for happy readers. But, there’s more than a Pollyanna message to deliver.

The dimensional-stone-import numbers carry a lot of weight in determining industry health because, frankly, all those totals on stone moving through ports-of-entry are about all we’ve got to analyze. Domestic-quarrying numbers only come out once a year; a quick comparison with import data shows at least 85 percent (and usually more) of dimensional granite, marble and other varieties consumed annually come from beyond the borders.

When I first started following the stone trade, I noted several locations published USITC numbers on stone on a monthly basis – all with differing totals. Armed with the Harmonized Tariff Schedule and several weeks of after-dinner numbers-crunching, I reverse-engineered the results; after verifying some additional categories, I developed my own formula on U.S. stone imports.

The results are the Import Trends articles I’ve written throughout the last decade. With a history of thousands of calculations and Excel formulas, I’ve seen how to make numbers prove plenty of contradicting arguments, including the one I started with this month.

Using data from individual months is dicey; I do this on occasion for my StatWatch reports on my blog at Stone Business Online, but oddball exports or odder numbers can make markets appear to reverse direction every four weeks or so. To compare numbers, I like quarterly data, and totals for this year’s first three months are now available.

So, how can I come up with two different takes on the stone trade using the same data? In two words: value and volume.

Customs value – basically, the worth of goods declared at the port-of-entry – didn’t improve much for stone overall in the first quarter (1Q) of 2010. The total value of dimensional stone coming into the United States came to $398.7 million, or only an anemic 1.6-percent increase from the first three months of 2009 (generally considered the worst quarter for stone imports in half-a-decade).

All imported granite, at a 1Q 2010 value of $179.5 million, showed a peppy 12.2-percent increase from the same time last year. Not so for all imported marble ($80.6 million, down 11.4 percent), travertine ($57.9 million, down 3.7 percent), slate ($11.9 million, down 3.9 percent) and other calcareous ($22 million, down 27.7. percent). Only the omnibus “other stone” category showed a positive move, up 21.8 percent to $46.6 million.

Among the different countries exporting to the United States, results varied widely in 1Q 2010, with Brazil showing value increases in most categories, Italy showing large decreases, India and Turkey treading water ….

But that isn’t what you want to hear, is it? What about that volume part of the equation?

Because of the way the United States assesses tariffs, the USITC only records metric-ton weights on three types of stone: granite, marble and travertine. Since that trio makes up 80 percent of all imported dimensional-stone value, those figures should carry, yes, a lot of weight in assessing overall stone demand.

The big player here is granite, and for 1Q 2010 the volume numbers are good. Actually, they’re something short of astonishing.

In the first three months of last year, U.S. imports of “worked” (cut, slab and tile) granite amounted to 185,042 metric tons. In 1Q 2010, that came to 272.428 metric tons, or a 47.2-percent increase.

Some of that heft came from India, where 1Q 2009 granite imports sagged mightily and roared back a year later. The rest of granite’s Big Four – Brazil, China and Italy – also marked up gains from last year’s first quarter, with Brazil leading the way with 82,456 metric tons and a 31-percent increase.

Worked marble also showed a gain in 1Q 2010 with 38,152 metric tons, although the 4.1-percent increase paled next to granite’s. Italy, the leading worked-marble exporter to this country in 1Q 2009, fell to second place (8,424 metric tons) for this year’s first quarter. China, however, more than picked up the slack at 13,917 metric tons, or a 35.8 percent increase from last year’s first quarter.

Travertine also advanced to 100,094 metric tons, a modest increase of 4.3 percent from 1Q 2009. Turkey, the U.S. market maker with travertine, increased its 1Q exports by 12.1 percent in 2010 to 80,719 metric tons.

It doesn’t take a doctorate in economics to see that more stone’s showing up at the beginning of 2010. It’s unlikely that importers, distributors and suppliers are stuffing supply yards full of stone faster than it’s being sold, so it’s fair to say that consumption is rising. And, with commercial real estate all but dormant, this is a rise in residential use that will benefit small and mid-level fabrication shops.

It’s also apparent that, with dimensional-stone values going south and volume going up, international stone prices are getting softer by the shipload. Falling currency values (including the euro) add to price volatility. This may not be good news in Vitoria, Verona and other foreign stone hubs, but lower declarations on containers at the dock should offer more value at U.S. stoneyards.

Of course, we’re nowhere near 2006 levels, and there’s no guarantee of continued increases through mid-year 2010. For now, though, the amount of stone entering the U.S. market offers good indications of recovery.

That’s a story worth telling. And I’ve got numbers to back it up.

Emerson Schwartzkopf can be reached at emerson@stonebusiness.net. You can read his blog here at Stone Business Online and stonebusinesseditor.wordpress.com. And don’t forget to keep up with Stone Business on Twitter and Facebook.