- Published: 02 May 2006 02 May 2006
By Emerson Schwartzkopf
Is the U.S. dimensional-market slowing down?
Looking at overall import data for natural stone from last year, the quick answer is yes. The longer answer is, well, it’s complicated.
And, using the term slow in the current stone market isn’t as dire as it sounds. The 20.7-percent rise in imported stone value in 2005 over the previous year is a nice bit of growth – it’s just not as good as the year before.
The $2.8 billion in stone that passed through U.S. entry ports marks yet another record, and the $3 billion mark should easily be surpassed this year. The outlook remains bright, although it’s worth watching those small clouds forming in the blue sky.
A month rarely passes by without someone – usually from a large consulting firm – calling the Stone Business offices with questions about the U.S. stone trade. The voice on the other end of the line tries to sound confident, but it only takes a few minutes until the inevitable anxious question: “Is there any way to track this industry?”
Part of stone’s success is its ability to fly under the usual radar of industry measurement. The only solid data for this rather far-flung business comes with the amount of stone imported into the country, which accounts for at least 80 percent of total U.S. dimensional-stone consumption.
Those numbers come from the U.S. International Trade Commission (USITC) and the tracking of U.S. Customs Bureau data with tonnage and valuations used to assess tariffs. The numbers on raw-material supply are nowhere near the final retail amount of stone products – the value added by distributors, fabricators and installers is the subject of a sophisticated guessing game – but the amounts are a sure way to check the pulse of the U.S. stone industry.
The USITC database now offers 10 years of statistics on stone imports, and there’s one indisputable fact: It’s been a glorious decade for stone imports. The $563.4 million of dimensional stone entering the United States in 1996 grew in 2005 to $2.8 billion last year, with nary a reversal from year to year.
The increase in import values would be an impressive record for any industry, but the amazing factor is that, in inflation-adjusted dollars, stone now is actually cheaper, per ton, than in 1996. As shown in last year’s report (“A Factor of Two,” Stone Business April 2005), an average slab of imported granite in 2004 was one-third cheaper than a comparable slab in 1996; the ratio isn’t as generous in 2005, but dimensional stone still costs less now than 10 years ago.
The haze on the horizon involves the rate of growth in total U.S. dimensional-stone imports. Last year, the value of stone imports grew by 20.7 percent – a hot number in nearly any construction-based industry. However, that didn’t match the 27.4-percent increase from 2003-2004, which takes a bit of steam out of the growth rate.
As U.S. stone-import levels grow in size, it’s going to be a tough act to keep the rate of growth at record levels. Still, it’s worth watching that growth-rate number; if it gets significantly smaller, dimensional stone may be maturing. There’ll still be more work, but not at today’s breakneck rate.
A look back at the last 10 years, however, reaffirms the major changes in the worldwide stone industry. The evolving sources of U.S. stone imports show a reshuffling of major players in the world stone market.
It shouldn’t be a surprise that the biggest changes came in granite imports. In 1996, the customs value for imported granite totaled $157.2 million, with Italy leading the pack with 44.7 percent of the trade. Back then, the list of top five granite-importing countries looked like this:
1. Italy ($69 million)
2. Canada ($28 million)
3. India ($23 million)
4. Brazil ($21 million)
5. Spain ($8 million)
In 2005, the value of imported granite skyrocketed to $1.2 billion. There’s also a new leader: Brazil, with 32 percent of the market. Today’s top five in granite now look like:
1. Brazil ($398 million)
2. Italy ($298 million
3. China ($223 million)
4. India ($195 million)
5. Canada ($47 million)
Marble saw less growth in the last 10 years – from a total import value of $108.9 million in 1996 to $407.8 million in 2005 – and Italy stayed the course as the main source every year. Its share of the marble-import market shrank from 1996’s 60 percent to 44 percent last year, as Spain, China and Turkey all made significant gains (and Greece didn’t).
Travertine may be the success story of U.S. stone imports in the past 10 years, due exclusively to one country: Turkey. In 1996, it exported $2.8 million to the United States, amounting to a five-percent share; last year, Turkey shipped $295.6 million in travertine to U.S. ports, snaring 62.6 percent of the stone’s market.
Turkey’s dominance overshadows the progress of other countries in travertine, such as Peru. In 1996, Peruvian travertine imports totaled all of $45,000; last year, that grew to $17.9 million.
The 10 years of growth also reached down to other types of stone; slate, for example, grew from $28.5 million in 1996 imports to $118.5 million in 2005. Italy led the market in U.S. slate imports in 1996; now, it ranks a distant fourth (with $6.8 million) to India ($47.4 million), China ($45.7 million) and Brazil ($11.2 million).
Granite recorded yet another banner year in 2005 dimensional-stone imports, with a total customs value of $1.2 billion. So, with 22-percent growth from 2004, is there a cause for concern here?
Let’s roll back one year. From 2003-2004, granite imports grew by 41 percent. Step back another year, and the annual growth rate came in at 28 percent. And, suddenly, that 22-percent growth in granite imports looks a lot less amazing.
Don’t start reaching for the parachutes, though; other industries would salivate over that kind of double-digit growth. Granite is still climbing high, but the rate is great, not spectacular.
The big news is that Brazil, after overtaking Italy as the tonnage leader several years ago, is now the firm leader in granite import values. Brazil’s $398.9 million in granite represents a 46.5-percent gain from 2004 and easily outpaced Italy’s $298.2 million. China also boosted its granite imports in 2005 by 53.7 percent, with its $223.3 million moving it into third place past India’s $195.4 million.
Collectively, those four countries accounted for 88.1 percent of all U.S. granite imports last year – up from 84.5 percent in 2004.
The main market for granite imports (along with all other dimensional stone) is in cut/slab “worked” stone instead of boulders and blocks. Measured by customs value, cut/slab granite accounted for 98.9 percent of all granite imported in 2005.
U.S. ports of entry saw two million metric tons of cut/slab granite pass through in 2005, a 19.2-percent increase from the previous year. Brazil easily dominated the volume battle among granite’s Big Four with 631,428 metric tons last year, showing a 10.9-percent increase from 2004.
However, Brazil’s share of the total 2005 cut/slab granite tonnage decreased slightly – from 2004’s 33 percent to 30.7 percent – due to a faster rate of volume growth from its three big rivals.
China posted the biggest jump last year, with its 335,628 metric tons representing a 36.8-percent increase from 2004. Italy also beefed up its cut/slab granite exports to the United States by 30.1 percent with 421,612 metric tons this year, and India posted a 22.4-percent increase with 470,263 metric tons.
The real surprise in cut/slab granite imports this year, though, comes in value and the average value per metric ton from each of the Big Four. Italy again leads the gang with an average $708 per metric ton ... but that’s a steep decline for the $884.20 average in 2004.
Brazil also found U.S. importers willing to pay more – a lot more – for its granite in 2005. Its average value per metric ton came to $628.28, a major move up from last year’s $474.70.
China also saw an increase in its average value per metric ton in cut/slab granite imports, from 2004’s $589.01 to $662.45 this year. India remained the value leader, with its 2005 average of $414.83 dropping slightly from last year’s $432.82.
Italy once provided the bulk of all U.S. imports of dimensional stone, and there’s one material where bella Italia remains the go-to country: marble.
The $407.8 million, in customs value, of marble imported during 2005 is a 27.4-percent increase from the previous year, and Italy’s $181.2 million account for a 38.1-percent share. Spain, the next-largest importer, only gets 15 percent of the marble-import market with its $71.7 million.
China, with $57.4 million, and Turkey, at $50.8 million, placed third and fourth, in U.S. marble imports. Greece and Mexico led the rest of the lineup in imports at $18.5 million and $17.8 million, respectively.
A close look at U.S. imports of cut/slab marble for 2005 reveals a couple of interesting points. First, the value of worked material, compared to total marble shipments, entering the country is a much-smaller percentage than granite; processed marble only accounted for 45 percent of the customs value for all marble imported.
The second thing worth noting is the sharp rise in cut/slab marble imports in 2005. The $217 million of cut/slab marble entering U.S. ports last year is a 40.4-percent jump from 2004.
The 80,495 metric tons of cut/slab marble coming from Italy made the country the import leader in volume, well ahead of Spain’s 37,655 metric tons. China came in at a close third with 37,111 metric tons – a 73.7-percent increase from 2004 – while fourth-place Turkey’s 23,963 metric tons showed an impressive 86.3-percent increase from the previous year.
Fifth-place Greece shipped 5,632 metric tons of marble to the United States in 2005, while India came in sixth with 5,082 metric tons.
Italy also maintained its commanding lead in value-per-metric-ton for cut/slab marble imports in 2005 with an average $1,259; Spain’s $903 placed second. It’s a significant drop to Turkey’s $659 and China’s $580.
For sheer dominance of a market, nothing matches Turkey’s hold on the U.S. import market in travertine. The country already supplies just shy of two-thirds of all travertine shipped to the United States, and last year’s totals are the latest in a long line of aggressive import increases in stone value and tonnage.
The 42.8-percent increase in travertine import values from Turkey in 2005 is a slight drop from the 45.7 increase shown in 2004, but it’s not a cause for concern. In fact, since 1996, import values for Turkish travertine have grown every year by 40 percent or more – a pace unequaled by any other country for any type of stone.
Mexico, Turkey’s main rival in U.S. travertine imports, places a very distant second at $86.6 million, even with a respectable 11.5-percent increase in value from 2004. Italy – a country that led in travertine imports as late as 2000 – now comes in third at $47.4 million.
Turkey easily wins the volume game in travertine with 622,937 metric tons coming into the United States in 2005, marking a 46.6-percent increase from the previous year. Second-place Mexico sent 101,938 metric tons last year, showing a 22-percent hike from 2004.
With the rest of the top-five importers of travertine, Italy and Peru (third and fourth, respectively) ended up shipping less last year than they did in 2005. The United Arab Emirates, in fifth place, accounted for only one percent of travertine imports last year with 8,331 metric tons ... but that’s up from only 42 metric tons in 2000.
2005: OTHER STONES
Granite, marble and travertine seem to be the materials of choice in the U.S. market, with healthy import growth rates in the past few years. With everything else in dimensional stone, it’s the proverbial mixed bag when it comes to supply and demand.
With other calcareous stone – mainly limestone and alabaster – the $218.1 million in total import values last year marked a 9.3-percent drop from 2004. A slight deviation from last year’s numbers likely came when a federal court ruling deemed that some imported polished limestone would technically be identified as marble, but most of the drop came from countries sending less stone to the United States.
2004’s one-two lineup in other calcareous – Spain and Italy – switched positions in 2005, with Italy’s import value at $42.5 million and Spain registering $42.4 million. However, both countries showed a drop of 27 percent in total value in 2005 from the previous year.
Four of the top five importers of other calcareous stone, as it turned out, finished 2005 with lower import values than 2004. Only fifth-place Israel moved forward, with its $16.9 million marking a 26.3-percent increase.
The omnibus classification of “other stone” (all dimensional varieties not specifically cited, except for slate) showed import values of $259.4 million in 2005, up 14.8 percent from 2004. And, a new leader emerged in the category: Brazil, with $58.4 million, exhibited a 36.9-percent increase from the previous year. India moved up to second place with $56.9 million, a 44.8-percent hike.
Italy, the perennial leader in the other-stone category, slipped to third with $44.7 million, a 4.7-percent downturn from 2004. It also marked the fifth straight year that Italy’s values declined in other-stone imports.
Canada also dropped 9.5 percent in other-stone import values, finishing 2005 at $27.4 million for fourth place. China, meanwhile, moved to $26.9 million in the category last year, a 15.1-percent increase.
In slate, India and China solidified their positions in the U.S. market, with values of $47.4 million and $45.7 million, respectively. The two countries controlled 78.5 percent of 2005’s slate imports (Figure 8).
The $118.5 million in slate coming into the United States last year represented a 23.2-percent increase from 2004. India upped its U.S. slate imports by 19.2 percent, while China ramped up its shipments by 51.7 percent.
Brazil’s slate exports to the United States in 2005 came to $11.2 million, a 2.7-percent increase from 2004 and still not up to the country’s shipment of $11.3 million in 2002. And Italy, which led all slate importers in 1996 with $10.9 million, only brought in $6.8 million last year – a 20.6-percent drop from 2004.
Data for this article, and for accompanying charts, 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 /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).