Since 2021, affected by multiple factors such as the international situation, European natural gas prices have continued to soar, and the energy crisis has intensified. On September 27, local time, the Nord Stream Natural Gas Pipeline Company issued a statement stating that the three offshore pipelines of the "Nord Stream" natural gas pipeline have suffered "unprecedented" damage. It is still unclear when the gas supply will be restored. It is predicted that repairs to the Nord Stream pipeline may be necessary. It will take several months. As soon as this news came out, the already severe European energy situation became even worse.
European energy crisis spreads
Wave of bankruptcies sweeps Spanish ceramics industry
As energy and natural gas prices in Europe continue to soar, increasingly high production costs have overwhelmed many natural gas-intensive industries in Europe, especially the ceramics industry, which is a "big gas consumer". For ceramic tile companies in Castellon, Spain's main ceramic production area, they have collectively entered a cold winter in the industry and are currently closing ceramic factories one after another.
Recently, 77 Degrees reported that according to Spanish media reports, in just one week at the end of September, nine ceramic companies in Castellon had applied for ERTE ("Temporary Employment Regulation Document"), with a total of 1,152 workers were forced into temporary unemployment, including nearly 800 workers from the ceramic tile company Bestile SL, more than 110 workers from the ceramic company Todagres, which is part of the Fuertes Group, and the rest from some small ceramic tile companies.
Ascer, the Spanish ceramic tile manufacturers association, said that energy bills in 2021 have doubled to 939 million euros, and it estimates that energy bills will double again this year and exceed 2.1 billion euros, of which natural gas prices will increase by 146%.
The association pointed out that in the first seven months of this year, although the export volume of the Spanish ceramic tile industry continued to maintain a strong upward trend, increasing by 28.9% to 2.7324 billion euros compared with the same period last year, this increase was mainly due to an increase in costs. , especially due to the increase in energy costs and thus higher retail prices, its total export volume actually decreased by 2% compared with the same period last year, to 288.7 million square meters.
Pedro Rognoni, president of the Spanish Association of Fired Clay Bricks and Ceramic Tiles Producers, said that the ceramic industry is an energy-intensive industry because in order for products to achieve their high durability, the firing temperature must be 850ºC to 1250ºC. Before this energy crisis, energy costsNatural gas, in particular, accounts for about 40% of total production costs. Today, this proportion is close to 80%. In 2022, the cost of natural gas has increased by more than 500%, and companies that are unable to pass on the rising costs to selling prices are in crisis. Since this year, most companies have experienced kiln shutdowns.
In fact, in addition to the crisis of production suspension in Spanish ceramic factories, the situation of ceramic companies in other parts of Europe is not optimistic either. Previously, Pamesa Group, Europe's largest ceramic tile manufacturer, announced that its subsidiary Azuliber had completely stopped production activities, and 78 workers in the factory were about to lose their jobs; Polish ceramic tile manufacturer Cerrad also announced the suspension of 3 of 7 production lines due to record-breaking Natural gas prices, the company has also been forced to increase the price of some products by 100%.
In addition, Italy, another ceramic production area in Europe, is also facing the dilemma of high costs.
Energy costs increased 5 times, orders surged
The Italian ceramic industry is on the "point of no return"
According to Ceramic World Review magazine, since the Russia-Ukraine conflict broke out in 2021, the Western embargo on Russia has severely damaged the cheap natural gas needed to maintain the operation of (tile) kilns, while disrupting all commercial activities. In addition, the supply of high-quality clay from Ukraine has completely stopped. This suspension of supplies to the Italian ceramic industry has brought an unprecedented crisis. In addition, energy costs have soared (5 times in one year) and the ETS quota (European CO2 emissions charge) has reached 100 euros. Giovanni Savorani, president of the Italian Ceramics Industry Association, said that the Italian ceramics industry is experiencing a "perfect storm."
However, the Italian ceramics industry has not completely stopped production. In March 2022, 30 Italian ceramics companies applied for redundancy funds to provide a total of 4,000 workers, but only a fraction was actually used as global demand for Italian ceramic tiles surged, prompting manufacturers to quickly restart kilns furnace to avoid losing market share.
Giovanni Savorani, President of the Italian Ceramics Industry Association, said, “We are currently operating at full capacity.Although we had to apply for a 10-20% price increase to at least partially offset the higher costs, we did not lose a single order. ”
However, the total ban on Russian natural gas has made it difficult for Italian ceramic companies to control production costs. Roberto Fabbri, chairman of ABK Group, said that although prices have increased by 17% since November last year, ABK is still operating at full capacity. Local business leaders say this is a strange crisis because it involves very high costs, double-digit price increases and high demand growth. This simultaneously pushes up corporate income, but increases uncertainty.
This year, the continued surge in energy prices may make the tight bowstring of the European ceramic industry close to breaking. Paolo Mongardi, chairman of the Italian Ceramic Ceramic and Equipment Manufacturing Association (Acimac), said, "The ceramic tile industry is in a contradictory situation: companies have a large number of orders. , but cannot produce. The industry has reached the edge of suspension. Unless there is a sudden turnaround, our entire industry will be on a path of no return."
Factories in the European ceramics industry are changing shift patterns and upgrading kilns to cope with sharp increases in costs, Reuters reported.
Energy issues plague China’s ceramic industry
Price increases, kiln shutdowns, and power and production restrictions are taking turns
The vigorous energy crisis in Europe has caused the ceramic industry to face huge uncertainties. However, in the domestic ceramic industry, production line shutdowns and production reductions due to energy problems also occur from time to time.
This year, ceramic companies faced the difficulty of rising energy prices just after resuming work. The Enping production area in Guangdong even experienced "five consecutive increases in 12 days", with prices as high as 7.18 yuan/m³. Affected by this, many ceramic companies decided to postpone the ignition of kilns, and some companies that had already restarted production had to choose to stop kilns. For the ceramic industry, energy costs account for 30% to 40% of the overall cost. If the prices of natural gas, coal, electricity and other energy sources closely related to ceramic tile production soar to a certain level, many companies will choose to stop kilns and reduce production because they cannot absorb the costs.
Since 2022, natural gas, coal, etc. in major ceramic production areas such as Guangdong, Jiangxi, Hebei, Fujian, Hunan, and Sichuan haveEnergy prices have experienced multiple rounds of increases: the price of natural gas in Guangdong production areas soared to 7 yuan/m³ at the beginning of the year; the gas price in Gaoyi, Hebei rose from 4 yuan/m³ to 6 yuan/m³ after the Spring Festival; the price of centralized gas supply in Gao'an increased at the beginning of the year. After several price increases, it has experienced three consecutive increases since September; coal and other energy prices in Fujian, Hunan, Sichuan and other production areas also showed an upward trend during the year.
Due to high energy costs, the kiln opening rate in the ceramic industry this year fell below the historical freezing point. At the end of June, industry insiders revealed that more than 50% of the production lines in the Guangdong production area had stopped kilns, and the kiln opening rate was only 40%. Since June, it has been reported that many large ceramic companies in Guangdong have stopped production lines, reduced production, and laid off employees during holidays. Some ceramic companies with stable production have also issued notices of salary cuts. At the same time, affected by factors such as rising production costs, price increases in the industry are also emerging. Not only small and medium-sized ceramic companies, leading ceramic companies such as Dongpeng, Marco Polo, New Pearl, Mona Lisa, and Hongtao have also announced price increases. .
In addition, "power cuts" and "rising electricity prices" are also one of the main reasons why a large number of ceramic companies have to suspend production and limit production every year. This summer's hot weather has been particularly severe, and residents' electricity consumption has surged. In order to provide electricity to the people, large areas of kilns in Sichuan, Hunan, and Hubei ceramic production areas have been shut down. Some companies can only maintain the production capacity of one or two lines.
Obviously, both the European ceramics industry and the Chinese ceramics industry are in deep energy troubles. Faced with this situation, Sacmi Group once published an article "Sustainable Development: Current Situation of Carbon Reduction in the European Ceramic Industry" stating that ceramics, as an industry that is difficult to reduce carbon emissions, urgently needs to improve the ceramic tile production process to reduce carbon dioxide emissions. Improve product sustainability and recover some energy. To achieve this, it is no longer enough to simply optimize and improve the factory. Fundamental changes must be made, including the use of heat and electricity generated from renewable energy sources to reduce carbon dioxide emissions; while maintaining product quality and output while reducing energy consumption.
