Morbi fires up its kilns again: relief for India, fresh competitive pressure for Spain's Castellón cluster
Tile Wars · markets · · Tile Wars
India's ceramic giant is back online after a two-month shutdown caused by the Iran war: 725 of 750 plants are producing again, but with costs up 80%. From Castellón, the Spanish industry watches the comeback of its biggest global rival with mixed feelings.
The news lands with a double reading from India. Morbi, India's ceramic capital and the main global rival of Spanish tile makers, has fired up its kilns again after a two-month total shutdown triggered by the Iran war and the cut in natural gas supplies. For the Plana cluster, the comeback means both market normalisation and the return of a competitor that had been off the board for weeks. According to industry sources in India, 725 of the 750 ceramic plants concentrated in this Gujarat hub are back to running on piped natural gas (PNG), with another 15 restarted on propane. "The war hit us hard, but the fuel supply was regularised very quickly and almost every plant is up and running again," said Haresh Bopliya, former president of the Morbi Ceramic Association. Soaring costs: a relief for Spanish tile India's freeze has come at a price. Average production costs in Morbi have jumped around 80%, pushing GVT and vitrified porcelain prices up by some €0.09 per square foot and lifting wholesale wall tile prices from €1.45 to €2.00. Read from India, that hike narrows the price gap that Indian ceramics had been using to squeeze Spanish manufacturers in markets such as the United States, the Middle East and northern Europe. The Spanish tile industry, which has spent a decade under aggressive pressure from Morbi —already the subject of EU anti-dumping investigations— is now watching closely to see whether this new cost structure sticks, or whether Indian producers eventually offset it with currency devaluations. Indian exports nearly halved The shutdown has temporarily gutted Indian exports: "they had almost halved," Bopliya admits. Morbi accounts for around 90% of India's ceramic output and 13–18% of global demand, shipping to more than 180 countries —including the EU. Its annual turnover is around €6.6 billion, of which roughly €2.2 billion comes from exports. During the shutdown, the inventories of Indian distributors were completely depleted, and the industry is now offsetting the export drop with a red-hot domestic market that is adding roughly €110 million in extra monthly turnover. That domestic cushion is something Spanish manufacturers —far more export-dependent, with around 75% of ASCER members' sales sold abroad— simply do not have.