U.S. Stone Imports 2007: Going Down

The general state of the U.S. economy can be tagged as the culprit, as spending for nearly every big-ticket item – including dimensional stone – decreased from previous years. The slowdown in the construction market, combined with a likely oversupply in the past few years of stone in warehouses and yards, lessened the flow of stone imports.

The value of the wobbly U.S. dollar, however, may have a larger impact on stone imports in the short-term future. The strong euro usually catches the blame for affecting import values, but it’s really one of the lesser problems in the declining purchasing power of the dollar for stone.

The euro grew in value in 2007 – it took $1.47 to equal €1 on Dec. 31, compared to $1.32 on Jan.1. The dollar’s ability to buy from euro-based countries (including Italy, Spain, Portugal and Germany) fell by 11.3 percent during the year.

But there’s Brazil for a large share of granite coming into the United States – and things didn’t change like the euro. It got worse.

While it took only 57 cents U.S. to equal one Brazlian real at the end of last year, that’s a dime more than at the beginning of 2007. It sounds insignificant, but it marked a 21.2-percent drop in the buying power of the U.S. dollar with arguably the country’s largest trading partner in dimensional stone.

Other countries feeding large amounts of stone into the United States also saw their currencies strengthen in 2007 and cut the dollar’s buying power – 19.7 percent for Turkey, and 13.6 percent for India. Even China’s renminbi yuan, unhitched from a constant dollar-value rate in 2005, managed some growth and cut the dollar’s buying power by 7 percent last year.

All of this doesn’t mean that U.S. dimensional-stone prices will shoot up dramatically through 2008. Currencies can fluctuate much faster than the speed of a container of stone coming across an ocean, and a curbing and reduction of international oil prices would buck up the dollar. (The U.S. dollar is the financial unit of trade in the oil business.)

Countries exporting to the United States also may run into excess-capacity problems, with quarries and factories producing large inventories that aren’t moving as fast to U.S. shores (or to China’s, following its Olympics-fueled building boom). Either the supply chain slows down, or producers in exporting countries cut prices to keep stone moving.

The bottom line now is that the import market for dimensional stone is dynamic. And any changes that come, aside from exporting countries adjusting prices to encourage buying, won’t be controllable along the chain from quarry to countertop.