Tensions Are Rising Between Russia and Ukraine.Ceramic Enterprises Suspend Production

25 Mar 2022/CTW

The Russia-Ukraine conflict has had a huge impact on the ceramic industry. Rising gas and electricity prices and shortages of raw materials have made most ceramic enterprises in Spain, Italy and Poland to suspend production for as long as 120 days.

More than 30 production units have stopped production

The gas price increased to as high as €345/MWh in Europe earlier. Even though the price has fallen,it is still 1.8 times the price before the conflict and 9 times higher than a year ago.

Electricity prices have also risen, tripling in Spain since before the conflict on March 9th. "No industrial activity can afford such a price," said the Spanish Ceramic Association Ascer. In the long run it will result in a lot of permanent unemployment."

According to the Italian Ceramic Association Confindustria Ceramica, if gas prices remain at current levels, production could fall by 30% this year, and it may even be necessary to import ceramic tiles from Turkey, India and the Middle East to meet the demands to the local market.

Gas prices in India increased 2.5 times, affecting 50 percent of ceramic tile production lines.Many production lines in Guangdong, China have been suspended due to the rising gas prices.

Numbers of  ceramic enterprises, such as Pamesa Group, have decided to charge additional energy fees based on gas prices and product specifications starting in April.

The situation in Russia and Ukraine has had a gradual impact on commodities, with coal, refined oil and container prices all experiencing multiple spikes. Supplies of kaolin and clay to Spain and India, which are highly dependent on imports from Ukraine, have also been suspended for several days. A cap on gas prices has been proposed by Greek prime minister as part of direct intervention by the EU on the market to limit increases.

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