How the gas crisis influences the tile

You cannot understand life without uncertainty. It is not bad, it is part of life and we have to learn to live with it. And the same goes for the economy.

In recent years there have been many events that have kept us on our toes. Undoubtedly, the first months of Covid have been the most uncertain. At first we feared for our businesses and our economy. But luckily he got over it. And it is that life always continues no matter how difficult the circumstances are. And adapting to events and being agile in the face of changes undoubtedly helps us not only to continue, but also to grow.

For the tile, renovation and construction sector, the following months to confinement were good. After all, many people had kept their jobs or received ERTEs. And families' ability to save increased due to the inability to go out and travel.

In addition, the need to be at home for months made us want to improve it, increase our comfort in our home. That led us to change the sofa, paint the rooms, fix the appliances, change the tiles in the bathroom or the floor of the terrace. 

Many even changed their home, to a larger one, with a balcony. or with a garden.

Once this first "post covid" phase was over, the raw materials began to fail and with that the stock problems began. In our activity, the tile sector, there were large stock breaks due to lack of land, but also due to a lack of pallets or plastic. Electricity went up....etc

This shortage caused prices to increase. Although nothing to do with what was to come.

At the beginning of 2022 and especially since the war between Russia and Ukraine began, uncertainty and tile prices skyrocketed.

On the one hand, most of the raw material to make the tile (clay) was imported from Ukraine. Although this seemed like it was going to be the main problem, it wasn't. The tile companies reached agreements with other countries, they even began to exploit quarries in Spain.

It has been the gas cut and the rise in its price that have most affected tile prices. The main resource needed to fire ceramics is gas. Its price has multiplied by 10 and therefore the cost of manufacturing has skyrocketed, affecting the PVP of the tile.

The first weeks the brands did not stop modifying their rates, which was a chaos for stores. Then a less bad option was chosen. The rate would remain fixed for each month, an energy rate canon would be charged, based on the gas price of the previous month.

This translated means that without a tile it is worth 15 € base, the following month it can cost €15 + €3 /m2, for example.

This energy increase, as we have said, is modified every month. In the month of September, for example, we have an increase in the energy rate of between €3 and €5 per m2, depending on the factory and the value of the product it manufactures.

This represents an increase in price compared to to the previous year of 25% or 30%.

It seems that this is not a good month to buy tiles, but the current uncertainty makes it perhaps better than the next. We don't know.

This uncertainty is certainly holding the economy back, and it may do so even more if things don't improve soon. And it is that this, in our sector, has several consequences:

1. Some factories are shutting down furnaces. The cost overruns are unaffordable for some suppliers, who do not find it worthwhile to continue manufacturing and prefer to "pull stock" waiting for an early solution.

2. The end customer thinks more about it before buying, and if they don't have an imperial need, they prefer to wait a few months to see if they can make their purchase cheaper.

3. Construction companies have stopped their projects. With the fluctuation of prices it is impossible to set a construction budget. And before encountering price increases that they can neither assume nor pass on to their clients, they prefer not to start new works.

Despite the fact that today's news is not the best, remember that everything happens. Be cautious but don't be paralyzed by the bad news that bombards us. Life goes on, and better without fear.