Anil Taneja, Director LITOSonline.com
Two months after the war in the Gulf the natural stone industry is beginning to note the negative effects, though unevenly. With transport from Asian, European and other suppliers seriously disrupted for such a long period, the warehouses in Emirates etc. are beginning to run out of inventory even though construction activity continues at a reduced level. This suggests that when the Strait of Hormuz finally opens (no one can predict when that happens), there will likely be a big jump in orders, at least for the short term.
In Asia, the Chinese market is still struggling from the severe slowdown in construction activity, now more than 5 years ago. Other Far East markets are also suffering from an economic slowdown. Construction activity in India remains unaffected till now, though India is likely to feel the full effects of higher inflation and disruptions in oil and gas supply very soon- a delayed effect which will almost certainly cast a shadow in economic activity and demand in the country.
In Europe, the dynamic markets like Poland ans Spain are unaffected till now, though transport costs have increased significantly. Early in the year there was hope that the German market would recover after 2 years of stagnation and with huge investments taking place in infrastructure, defence, etc. but the high energy prices mean economic activity is likely to remain weak in 2026. Other EU markets are relatively unaffected till now, though transport costs and higher costs of inputs are hurting the companies.
The Brazilian market is also unaffected, in fact, demand in the local market is actually slightly better than before.
In USA, the higher shipping costs from everywhere (anywhere from 50 to 100% more) has become an additional drag on demand. While the premium segment in housing remains active, less building activity overall, problems of affordability, higher energy prices, etc. all point to a slowdown in the market and difficulties for all kinds of companies, big or small.
With so much uncertainty and cancellations if flights taking place all the time, the industry trade shows held in the last two months saw a serious decline in visitors. Investments in new machinery have also fallen sharply, even survival is now a problem for many manufacturers.
All in all, towards end of April, the outlook does not look good for the natural stone industry and things could get worse if the blockade in the Strait of Hormuz continues much longer.
