Guangdong Ceramic Industry Faces Severe Pressure Amid Surging Energy Costs
Tile Wars · markets · · Tile Wars
China's largest ceramic production hub, Guangdong, is grappling with soaring natural gas and coal prices, kiln operation rates below 50%, and a growing influx of out-of-province competitors.
As 2026 reaches its midpoint, China''s largest ceramic production region, Guangdong, has encountered multiple challenges in the first half of the year.
On one hand, natural gas prices have risen to $0.683–$0.7/m³, with coal prices once exceeding $176/ton. Guangdong ceramic companies are under significant pressure from rising energy costs, prompting widespread price increases and production cuts. The overall kiln operation rate in the first half of the year remained below 50%. On the other hand, companies from other provinces are accelerating their entry into Guangdong, while OEM orders continue to flow to lower-energy-cost regions such as Jiangxi and Shandong, accelerating the pace of local enterprise consolidation.
Natural Gas and Coal Prices Surge Sharply
Since May, energy prices in Guangdong''s ceramic industry have experienced a sharp increase. Pipeline natural gas prices in Qingyuan, Zhaoqing, and Enping reached $0.683–$0.7/m³, with some areas hitting as high as $0.764/m³. In Foshan, gas prices rose to $0.62/m³ — a significant increase compared to six months earlier. For liquefied natural gas (LNG), national average receiving station and listed prices once approached $1,775/ton before easing to $954–$1,028/ton.
In addition to natural gas, coal — the primary energy source for the powder preparation stage — has also seen sharp price increases. According to an industry source, recent coal procurement prices in multiple Guangdong production areas once exceeded $176/ton, representing an increase of about 40% from six months prior. This surge not only affects coal-fired enterprises but has also directly pushed up production costs for most ceramic manufacturers during the powder preparation phase.
The rise in energy costs has produced two main effects. First, ceramic tile prices have increased, with multiple production areas in Guangdong issuing frequent product price adjustment notices in recent months, raising unit prices across different specifications. Second, many kilns have been shut down or reduced production. The number of operating kilns in Guangdong was already lower than in previous years in the first half, and the energy price surge has forced even more kilns to stop production. Overall, the kiln operation rate in Guangdong production areas remained below 50% in the first half of the year.
Companies from Other Regions Enter Guangdong While OEM Orders Flow Out
As market conditions continue to evolve, shifts in supply and demand are evident. The shutdown and reduced production of Guangdong ceramic companies have created substantial idle capacity, freeing up market space and encouraging companies from other regions to expand into Guangdong.
In the first half of 2026, companies such as Sun Ceramics and Luosifu Ceramics have made major moves into Guangdong, either establishing operations centers in Foshan or seeking factory and capacity cooperation. Additionally, more ceramic enterprises from Fujian, Sichuan, Shandong, and other regions are integrating Guangdong''s manufacturing resources through production line leasing, brand licensing, and enterprise acquisitions to transition toward higher-quality and higher-value-added products.
While out-of-province enterprises are attracted to Guangdong by its manufacturing advantages, location, supply chain, and brand concentration, the sharp rise in energy costs has significantly weakened Guangdong''s manufacturing competitiveness compared to other regions.