China’s Property Slowdown Rocks Turkish Marble Exports

(Bloomberg) --

Weaker Chinese demand for marble, used to bring a touch of opulence to hotels, offices and high-end homes, is taking a toll on the biggest global producer of the prized mineral.

Shipments from Turkey, home to more than one-third of the world’s marble deposits, are under pressure as property investment slows in the world’s second-largest economy.

Port Akdeniz in the southern Turkish city of Antalya has suffered the biggest hit. Cargo volumes at the harbor, whose hinterland includes more than 500 marble quarries, halved in the first six months of this year, while the number of containers, which are used to transport the material, was down almost 20%.

The decline in marble flows shows the far-reaching effects of China’s slowdown as the economy grows at the weakest pace since quarterly records began in 1992 and cement prices, a proxy for construction demand, continue to slide. Istanbul-based Global Ports Holding Plc, which runs Port Akdeniz, said Chinese importers are contending with a lack of state backing.

“The small importers in China are not being supported by the government in terms of the financing required,” Chief Executive Officer Emre Sayin said in an interview. White-veined black marble quarried in the Antalya region sells commercially for about $50 per meter slab, according to online prices.

Turkey accounted for 38% of all marble exports in 2018, while China gobbled up almost two-thirds of imports, according to data from the International Trade Centre, a joint agency of the World Trade Organization and the United Nations. The Asian nation’s appetite for stone blocks including granite and limestone has fallen “dramatically,” though it should remain the biggest single market, according to industry magazine LITOS.

Residential construction has propped up property investment in China all year, while office development and mixed-use retail have declined almost every month. Demand in the Asian country has ebbed before, Sayin said, most notably in 2016 amid a probe into tax-evasion claims involving Turkish marble exports.

Global Ports blamed the slump in marble shipments for a drop in first-half earnings reported on Tuesday. Sayin has turned his focus to the cruise-terminal business, where Global Ports is the world’s biggest operator and is seeking to build on its strength in the Mediterranean by expanding in the Caribbean.

©2019 Bloomberg L.P.