The Quartz Stone Industry Is Facing Difficulties Under The Impact Of The US-Iran Conflict: The Industry Is Undergoing Changes Due To The Double Price Hikes Of Shipping And Raw Materials.

I. Geopolitical conflict between the United States and Iran has comprehensively impacted the quartz stone export industry chain.
The military standoff between the United States and Iran directly blocked the core shipping channel of the Strait of Hormuz, which carries approximately one-fifth of the global crude oil transportation. This channel is also the necessary route for China's quartz stone exports to the Middle East, Europe, and South America. After the conflict broke out, global shipping companies collectively sought refuge and changed their routes, causing a chain reaction in the quartz stone export industry.
First, orders for local quartz stone in the Middle East have significantly decreased. Iran, Saudi Arabia, the United Arab Emirates, and other Middle Eastern countries are the core export markets for domestic quartz stone. After the conflict, local engineering projects were halted, foreign merchants postponed their purchase plans, and a large number of signed orders were postponed for shipment. Domestic quartz stone factories experienced product overstock and warehouse overflow, and small and medium-sized export enterprises faced severe pressure on cash flow.
Second, the risk cost of global freight has sharply increased. The war insurance premiums in the Persian Gulf and the Arabian Sea have soared by five times. Many international insurance associations have reduced the coverage of the Middle East sea area, and shipping companies have added thousands of dollars in conflict surcharges to the routes to the Middle East and Europe. Quartz stone is a heavy and large-panel product, with a large base for single-container transportation. Additional insurance and surcharges directly eat into the profit margins of enterprises.
Third, overseas market demand has diversified. Middle Eastern customers have reduced their procurement budgets, while European and South American buyers have taken the opportunity to lower prices. On one hand, logistics costs have risen, and on the other hand, terminal prices have been continuously lowered. Quartz stone export enterprises have significantly weakened their bargaining power.
II. The core causes of the continuous increase in shipping fees and their impact on the quartz stone industry
(1) Four major causes for the significant increase in shipping fees
The route had to be rerouted, and the voyage and fuel costs doubled.
After the passage of the Strait of Hormuz was blocked, the leading shipping companies such as Maersk, MSC, and CMA CGM all abandoned the Suez Canal route and redirected their cargo to the Cape of Good Hope. The single voyage duration increased by 10-14 days. The extended voyage directly consumed more fuel for ships, and the conflict pushed up international crude oil prices, with Brent crude oil remaining above 110 US dollars per barrel for a long time. Ship fuel costs increased by more than 65% year-on-year, and shipping companies could only pass on the costs by raising freight rates.
Effective transportation capacity contracted, and container supply was insufficient.
A large number of ships were stranded in anchorages for refuge or long-distance detours, resulting in a short-term decline in global container effective transportation capacity. The European, Middle Eastern, and South American routes continued to experience overcrowding and empty containers. Taking the Middle Eastern route as an example, the basic freight rate for 20-foot standard containers soared from before the conflict from 980 US dollars to 4,100 US dollars, an increase of over 300%, while additional surcharges such as旺季 surcharges, fuel surcharges, and war risk surcharges were added.
Insurance costs have significantly increased.
The war insurance rate for high-risk sea areas in the Middle East has been significantly raised. Quartz stone containers are high-value building materials, and insurance premiums have also risen accordingly. The additional insurance cost per container exceeds 1,000 US dollars, further increasing the overall logistics expenses.
Port congestion has exacerbated the turnover cycle.
Ships rerouting concentratedly docked at South African and peripheral European ports, causing a chain of congestion. The cargo arrival delay period was prolonged, and quartz stone large panels were prone to damage and moisture absorption when they were stranded in port for a long time. This further increased the enterprise's loss costs.
(2) The actual impact of the increase in shipping fees on quartz stone enterprises
The overall export cost soared, and profits significantly shrank.
The single container of quartz stone has a large loading capacity and high self-weight. Logistics costs originally accounted for 8%-12% of the export total price. The sharp increase in shipping fees directly pushed the logistics cost ratio to exceed 20%. Most small and medium-sized factories could not independently absorb the costs and could only passively raise export prices. The product price competitiveness declined, and overseas orders were lost significantly.
The delivery cycle of orders was prolonged, and customer trust was damaged.
The original shipping time of 30 days was extended to over 45 days. Overseas engineering customers' project schedules were forced to be postponed. Many long-term cooperating foreign merchants turned to local quartz stone manufacturers in Turkey and India for procurement. Domestic quartz stone enterprises lost stable channels.
Inventory and capital pressure intensified.
Finished products could not be promptly shipped out, and storage costs for warehouses continued to increase. At the same time, the goods' detention in the port has occupied a large amount of liquid capital, and the repayment cycle of small and medium-sized enterprises has been prolonged. Some factories with weak capital chains have been forced to reduce production capacity, stop production and reduce output.
III. The deep reasons and industry pressure behind the all-round price increase of quartz stone raw materials
The core production raw materials of quartz stone are divided into four categories: high-purity quartz sand, unsaturated polyester resin, color powder, and curing agent. The current price increase of raw materials is caused by the combination of three factors: geopolitical conflicts, cross-industry demand competition, and supply chain restrictions.
(1) Core causes of raw material price increase
The increase in crude oil prices raises the costs of resins and chemical auxiliary materials.
Polyester resin is the core raw material for bonding quartz stone and belongs to the downstream petrochemical products. The conflict between the United States and Iran has pushed up international oil prices, and the entire industrial chain of chemical raw materials has seen a price increase. The purchase price of resins has increased by 25%-40% year-on-year; curing agents, color pigments, protective additives and other supporting chemical materials have also increased in price simultaneously, directly raising the production cost of the plates.
The photovoltaic industry competes for high-purity quartz sand, and the supply of mineral sources is tight.
In recent years, the photovoltaic and semiconductor industries have experienced explosive expansion, consuming a large amount of high-purity quartz ore. The domestic exploitation of high-quality quartz raw materials is restricted, and the maritime transportation of imported ore is blocked. Building-grade quartz sand is in short supply. The price per ton of ordinary quartz sand has increased nearly twice compared to previous years, and the price increase of high-purity quartz sand required for high-end white and gold plates is even higher. The production cost of high-end quartz stone has risen by a much greater extent than that of ordinary general plates.
The import of overseas raw materials is restricted
Some high-quality quartz raw materials rely on overseas imports. The blockade of the Middle East shipping lanes has led to an extended transportation cycle and increased freight for quartz sand containers, and overseas miners have simultaneously raised the prices of raw materials, further pushing up the domestic raw material purchase costs.
Environmental control has raised processing costs
Environmental restrictions on mines and quartz sand processing plants have limited the production capacity of purification and processing, resulting in shortages in the raw material circulation process, and middlemen have raised prices to hoard stocks, further exacerbating the price increase.
(2) Industry changes brought about by raw material price increase
Product stratification intensifies, and the low-end market becomes highly competitive
After the increase in raw material costs, small and low-cost factories reduce the content of quartz sand and add a large amount of calcium powder for filling to lower the quality of the plates, resulting in quality decline and problems such as discoloration and cracking in after-sales services; leading brands insist on a 90% or higher proportion of high-purity quartz, and their pricing is forced to increase, and the price gap between high-end and low-end products continues to widen.
New product research and development and profit compression for high-end orders
High-end color plates such as鎏金, Kararra, and Panda White have higher demands for high-purity quartz and metal color pigments. The increase in raw material prices is even greater, and the profit margins of high-end custom orders have been significantly compressed. Enterprises have slowed down the pace of new product development.
The domestic home decoration and construction market is simultaneously under pressure
The price increase of raw materials is transmitted to the end stores, and the retail price of quartz stone countertops in China has increased. Construction customers turn to tiles, rock plates, and other alternative materials, and domestic market demand has weakened simultaneously.
IV. Industry response strategies and future development directions
Diversify market layout and reduce dependence on the Middle East market
Enterprises actively expand markets in Southeast Asia, Australia, and Latin America, diversify regional order risks brought by geopolitical conflicts, and reduce the proportion of single routes and single regional customers.
Optimize supply chain and lock in long-term raw material purchase prices
Sign long-term price lock-in agreements with quartz sand and resin manufacturers, reserve raw material inventory in advance, and hedge against short-term raw material fluctuations; select multiple channel mineral source suppliers to avoid restrictions on a single import channel.
Adjust product structure and control overall costs
Increase the proportion of high-value-added high-end quartz stone plates in shipments, improve the profit of individual products to offset the losses from shipping and raw material price increases; optimize production processes to reduce production losses and compress internal manufacturing costs.
Flexibly adjust foreign trade quotation models
Use stepped quotations and freight sharing schemes for foreign merchants, distinguish between FOB and CIF trade terms, negotiate with overseas customers to jointly bear the cost of rising logistics, and avoid bearing all losses alone.
Leverage domestic engineering market to offset the decline in exports
Focus on domestic channels in hotels, commercial real estate, and interior decoration and construction projects, balance the idle production caused by fluctuations in overseas orders.