Understanding the 2018 Market Volatility of Engineered Stones These days, engineered stone is extremely popular in both the residential and commercial markets. More than ever, homeowners are turning to engineered stone options such as quartz for their countertops, and commercial clients are choosing engineered stone for other applications. According to Adam Weinberg, general manager of Cosentino Boston, “we don’t have exact numbers, but in 2017, the dollar value of imported Chinese quartz was around $460 million. Last year it was over $600 million.” In 2018, a tariff on engineered stone had a significant impact on the industry. By having a better understanding of what these tariffs are and what they entail, customers looking to purchase engineered stone materials (such as quartz) can be better informed. A Summary of the Situation A recent tariff affected the engineered stone industry significantly; this anti-dumping tariff began with a USA-based stone manufacturer known as Cambria bringing forth a lawsuit against five Chinese quartz makers. Ultimately, the International Trade Commission found that the Chinese government was using their own resources (including raw materials, electricity, and natural gas) to subsidize these manufacturers – allowing them to sell their materials in the United States market at a very low cost. As a result, the United States government has since imposed a strict anti-dumping tariff with rates varying from about 200% to 300%. A separate tariff was also imposed in September of 2018 that initiated a 10% increase on tariffs for imported stone from China. That percentage was slated to increase another 25% on January 1st, 2019 but has since been put on hold by the federal government as the US and China continue to negotiate the situation. How Customers May Be Impacted So, what do these tariffs mean for customers looking to purchase engineered stone such as quartz? First of all, it is important to stress that not all engineered stone is affected by these tariffs. Brands like Silestone, Cambria, Pental Quartz, and Caesarstone have released letters stating that they will not be raising their prices due to these tariffs. Because their products are not produced in China, they will not see the same impact as the numerous other China-based brands. However, stones that are made in China have seen a significant increase in prices as a result of these tariffs. This has also led to reduced product offerings, as fewer Chinese brands are entering the United States market. In other words, the “playing fields” have been more-or-less leveled. Furthermore, for those who have selected slabs from Chinese-based stone manufacturers based on small swatches, it is important to secure a fabricator as soon as possible. Because many Chinese manufacturers are moving their production to factories to other countries like Taiwan, Vietnam, and India for example (to get around these tariffs), it is possible that the stone selected based on the sample could end up being different than the actual slab the customer ends up with. Specifically, there may be variation in the material and supply could be an issue as well. Quartz and other engineered stone options are commodities, but while supply is down, it may be difficult to find specific styles – or slabs may be coming in from different factories with a slightly different look. This is why buyers who see something they like are encouraged to purchase and secure their orders sooner rather than later. Thinking About Buying Engineered Stone? If you’ve been thinking about purchasing engineered stone, you shouldn’t let these tariffs scare you off. Ultimately, the prices of engineered stone will not be fluctuating forever—and there is a good chance that the stone you’re considering won’t be affected at all unless you are looking to buy from a Chinese manufacturer. And of course, as manufacturers move their production outside of China and to other countries, prices will likely stabilize. In the meantime, the best thing you can do is lock in the price of the stone you want by making your purchase right away. Otherwise, uncontrollable pricing fluctuations could lead to a higher final price than you may have originally been quoted. As explained by Caesarstone, “customers and prospects that purchase, specify, or merchandise Chinese-source quartz will need to make immediate plans to secure a stable supply of quartz.” You can also avoid a lot of the headaches around price increases by simply purchasing from a manufacturer that is located outside of China since these manufacturers will not be affected by the tariffs mentioned here. At Connecticut Stone, we are committed to keeping our customers informed on industry changes that could affect them. Please feel free to reach out to us with any questions or concerns you may have. Our knowledgeable and friendly team would be happy to help.