As the world’s largest producer of ceramic tiles, China has one of its important ceramic tile production bases located in Quanzhou City.
Meanwhile, as a China sourcing agent based in Quanzhou City, SourcingBiz has a deep understanding of the ceramic tile industry in Quanzhou. Since 2016, SourcingBiz has been entrusted by many international customers to carry out ceramic tile product procurement, factory inspection, on-site quality testing, translation, and other related work in Quanzhou. The ceramic tile industry in Quanzhou has experienced rapid development in the past few decades, but since 2020, with the impact of COVID-19 and the world economic downturn, the most serious problem is the bursting of the foam in China’s real estate industry, and the ceramic tile industry in Quanzhou is falling into operational difficulties in 2024.
Here, SourcingBiz provides a brief introduction to the status of the Quanzhou ceramic tile industry in 2024.
Background of China’s Ceramic Tile Industry
Since 2021, ceramic tile factories in China have been gradually shutting down and transitioning to producing lithium batteries. Since June 2024, the number of ceramic tile factories in China that have shut down their kilns has continued to increase, causing widespread concerns in both upstream and downstream industries.
Quanzhou ceramic tile factories, known for their strong ability to respond to the market, have also encountered difficulties in supporting themselves in the current predicament. The number of kiln shutdowns and production cuts in Quanzhou ceramic tile factories has reached a historical peak.
Why is the Quanzhou ceramic tile factory, which has a strong vitality, also facing such difficulties now? In the context of the economic downturn, the trend of building materials consumption has also shifted from luxury and high-end to low-priced and economical consumption. In the context of pursuing price advantages, the cost disadvantage of Quanzhou ceramic tile factory is a significant hurdle.
Advantages of Quanzhou Ceramic Tile Industry
In terms of the overall competitiveness of China’s ceramic tile production areas, Quanzhou ceramic tile production area was the first to initiate energy adjustment more than 10 years ago, resulting in higher costs than other production areas such as Foshan, Gao’an in Jiangxi, and Zibo in Shandong. However, in order to survive and develop, Quanzhou ceramic tile factories have explored many methods and accumulated considerable experience in coping with market competition.
Firstly, it has promoted the iteration and diversification of ceramic tile products, while also greatly enhancing product quality and value, resulting in improved customer quality. For this reason, the Quanzhou ceramic tile production area has maintained stable development and laid a solid foundation.
Secondly, in order to enhance market competitiveness, Quanzhou Ceramic Tile Factores have taken advantage of small production lines, the good foundation of antique tiles, the convenient location for export, and high flexibility in factory management to embark on a path of personalized development that integrates multiple categories.
In addition, small production lines have relatively less sales pressure, and take more courage to try new product development, and more guarantee in quality stability, which has greatly improved the vitality and reputation of the Quanzhou ceramic tile production area.
Under the combined effect of these factors, the Quanzhou ceramic tile production area has maintained a long-term stable development trend for more than 10 years. Even in 2023, the kiln opening rate has remained stable at around 70% throughout the year, and some ceramic tile factories have achieved sales growth.
Why is the Quanzhou Ceramic Tile Industry Facing Difficulties in 2024
Why was the long-term stable sales revenue of the Quanzhou ceramic tile production area broken in 2024? This is because market competition has shifted towards price competition, and the Quanzhou ceramic tile production area has been dragged down by cost disadvantages.
Since 2024, the market demand continue to be weak, the market recovery remains sluggish, and the significant fluctuations in international shipping costs further deteriorate the already fragile market environment. Low prices have become a competitive hotspot in the entire industry, and some major brands in the industry have also lowered their brand level and joined the ranks of price reductions. In this situation, cost has become the key point between ceramic tile production areas and enterprises.
In terms of energy costs, currently competing head-on with the Quanzhou ceramic tile production area, there is the Zhangzhou ceramic tile production area in Fujian Province (Zhangzhou ceramic tile factories mainly use coal to gas and have lower prices than the Quanzhou production area). The natural gas prices in several major ceramic tile production areas in Guangdong Province are slightly lower than those in the Quanzhou ceramic tile production area. Jiangxi ceramic tile production area mainly uses coal to produce gas, and the overall price is also lower than that in Quanzhou ceramic tile production area. In addition, factors such as the implementation of staggered powder production in the drying tower have also increased the additional low-efficiency costs of the Quanzhou ceramic tile factory.
At the same time, in terms of product category competition, the rustic tiles from Quanzhou ceramic tile production areas intersect with these production areas, and the mainstream category of floor paving stones is constantly being regionalized. In addition, some enterprises in foreign production areas have been unable to support their existing production lines in the past two years with large categories, and have had to resort to small categories. These ceramic tile products, with their cheaper prices, are also dividing up the original market of Quanzhou ceramic tile production areas.
At a time when the industry is entering into fierce cost and price competition, the Quanzhou ceramic tile industry is constrained by energy and powder production costs. Even with all the advantageous capital accumulated previously, it is not enough to cope with the “encirclement” of other ceramic tile production areas. This is the reason why the Quanzhou ceramic tile production area is currently experiencing a new high in kiln shutdown and production reduction.
How to Deal with the Current Predicament
Perhaps some people may say that since the production cost of ceramic tiles in Quanzhou is high, it was able to be digested by the market 10 years ago, and now it is also possible, because Quanzhou ceramic tile production areas can easily create enterprise competitiveness through personalization.
But it’s actually not the case. Because the market environment is no longer comparable. Ten years ago, during a period of increasing market demand and rising industrial development, enterprises were left with sufficient time and market space to digest high costs. However, the current market remains sluggish, with price competition reaching the level of hand-to-hand combat or even losses. Once the cost is slightly higher than others, it is inevitable to lose competitiveness and market share. Just like when the amount of water in a pipe suddenly decreases and you need to share more water than a person, the simplest way is not to turn on the faucet, but to see how low the water pipe and faucet are located – this is called a cost depression.
Perhaps some people are hoping for a price reduction in energy, but don’t forget that gas companies are also enterprises with cost and profit considerations, and unilateral price reductions are not very realistic. Objectively speaking, natural gas is a commodity with its own price formation mechanism, and price fluctuations also follow market rules, which should be left to the market to solve.
In short, the problem still requires Quanzhou ceramic tile factories to seek solutions on their own. From the perspective of promoting the steady development of the industry, it is necessary for the local area to carefully study effective ways to solve problems, as it is not due to inferior technologies. We believe that by gathering wisdom from all parties, we can find a balance point and jointly build the competitive advantage of Quanzhou ceramic tile industry, promoting the steady development of the industry.
Anyway, Quanzhou ceramic tile factories need to have firm confidence, avoid weaknesses, leverage advantages, and endure the harsh winter.
