China Marble Industry Overview

China’s marble industry has grown significantly in recent years. China has taken the leading role in the consumption of marble slabs, which was proved by its shares in the sales volume and sales value of marble slabs in the global market. In 2016, China occupied approximately 31.3% in the global sales volume of marble slabs and approximately 25.1% in the global sales value of marble slabs. Meanwhile, China possessed the largest production volume of marble slabs around the world, with an approximate 32.0% share of the world’s total processing output of marble slabs in 2016, in order to meet its sizeable demand.

China marble market size

The market size of marble industry in China in terms of sales revenue experienced significant growth from 2012 to 2016. Revenue derived from sales of marble products increased from CNY 118.7 billion in 2012 to CNY308.0 billion in 2016, representing a CAGR of 26.9% from 2012 to 2016. Due to the expected sluggish GDP growth from 2017 to 2021 in China, which will slow down the growth of marble products used for architectural decoration in real estate industry, the market size of China’s marble industry in terms of sales revenue is anticipated to grow moderately at a CAGR of 14.4% from 2017 to 2021.

End market applications

Architectural decoration (including home decoration and public decoration), infrastructural and landscaping and artworks are the key end markets of marble products in China.

Architectural decoration

Revenue of China’s architectural decoration market grew from CNY 2,902.1 billion in 2012 to CNY 4,002.7 billion in 2016, representing a CAGR of 8.4% from 2012 to 2016, according to research. Public decoration and home decoration are two key areas of architectural decoration. As one of the key decorative materials, marble is a popular choice for decoration. Spurred by increasing demand from residential customers as well as initiatives in real estate development for “Fine Decoration” (精装修), the home decoration segment in China grew at a fast pace, with the sales revenue increasing from CNY 1,397.3 billion in 2012 to CNY 1,933.9 billion in 2016, representing a CAGR of 8.5% from 2012 to 2016 according to research. Public decoration mainly includes decoration of office space, commercial space and public facilities. The sales revenue of the public decoration segment in China also grew at a CAGR of 8.3% from 2012 to 2016. In line with the growth in the architectural decoration market and the increasingly wide application of marble products in China, the sales revenue of marble-based architectural decoration grew from CNY 81.3 billion in 2012 to CNY 208.6 billion in 2016, representing a CAGR of 26.6% from 2012 to 2016 according to research. It is expected that the upward trend will continue from 2017 to 2021, with the sales revenue of marble-based architectural decoration growing at a CAGR of 13.6%, which will drive the growth of the marble industry.

Infrastructural and landscaping industry

Marble products are widely used in the construction of infrastructure and modification and improvement of outdoor public areas. The sales revenue of the infrastructural and landscaping industry in China increased from CNY 1,744.7 billion in 2012 to CNY 2,181.9 billion in 2016, representing a CAGR of 5.7% from 2012 to 2016. In line with such growth, the sales revenue of marble-based infrastructural and landscaping industry in China grew at a CAGR of 26.7%. It is expected that the upward trend will continue from 2017 to 2021, with the sales revenue of marble-based infrastructural and landscaping industry growing at a CAGR of 10.5% from 2017 to 2021.

Distribution of marble mines in China

According to research, Southern China has the most abundant marble resources in China, accounting for approximately 30.1% of China’s marble reserve volume as at 31 December 2016. Southern China is followed by Western China, where our Leishoushan Project is located, which accounted for approximately 27.3% of China’s marble reserve volume as at 31 December 2016. The shares of China’s marble reserve volume as at 31 December 2016 by other regions are 19.5% for Eastern China, 15.2% for Northern China and 7.9% for Central China. Guangdong, Guangxi, Hebei, Shaanxi, Guizhou, Yunnan and Sichuan are major locations of marble reserves in China, accounting for approximately 14.5%, 13.4%, 7.6%, 7.2%, 5.2%, 4.5% and 3.7% respectively, of China’s marble reserve volume as at 31 December 2016. Shaanxi, Guizhou, Yunnan and Sichuan are the major locations of marble reserves in Western China, accounting for approximately 26.4%, 19.0%, 16.6% and 13.5% of its marble reserve volume as at 31 December 2016. Fujian Province is not a major location of marble reserves as it only accounted for approximately 1.5% of China’s marble reserve volume as at 31 December 2016. In China, yellow marble mines are mainly located in Henan, Guangdong, Jiangsu and Guizhou provinces, red marble mines are mainly located in Anhui, Sichuan, Hebei and Liaoning provinces and grey marble mines are mainly located in Zhejiang, Yunnan and Shandong provinces.

MARBLE CONSUMPTION

Marble blocks

According to research, the sales volume of marble blocks in China has grown from 4.0 million m3 in 2012 to 9.3 million m3 in 2016, representing a CAGR of 23.5%. The cooling down of macro-economy in China and the saturation of the market may slow down the growth of sales volume of marble blocks, which is estimated to increase at a CAGR of 6.7% from 2017 to 2021. Yellow and grey are essential base colors of marbles used in architectural decoration. Yellow marble products are the most common marble products that are typically used in high-end residential and office building decoration in China. The sales volume of yellow marble blocks in China increased from approximately 1.2 million m3 in 2012 to approximately 3.2 million m3 in 2016, representing a CAGR of 27.0%, and it is expected to keep increasing at a CAGR of 10.2% from 2017 to 2021, to reach approximately 5.4 million m3 in 2021. Grey marble blocks are relatively scarce in the market and the combined use of grey marble blocks with decoration wood has become a fashion trend in China. The sales volume of grey marble blocks in China grew from approximately 0.4 million m3 in 2012 to approximately 0.9 million m3 in 2016, representing a CAGR of 24.1%, and it is expected to keep growing at a CAGR of 9.7% from 2017 to 2021, to reach approximately 1.5 million m3 in 2021. The sales volume of red marble blocks in China increased from approximately 0.3 million m3 in 2012 to approximately 0.7 million m3 in 2016, representing a CAGR 19.4%, and it is expected to keep increasing at a CAGR of 8.9% from 2017 to 2021, to reach approximately 1.0 million m3 in 2021.

Marble slabs

According to research, marble slabs accounted for more than 90% of market shares of China’s marble industry in terms of total sales revenue in 2016. The sales volume of marble slabs in China increased from 242.3 million m2 in 2012 to 520.2 million m2 in 2016, representing a CAGR of 21.0%. It is anticipated that the sales volume of marble slabs in China will continue to grow at a CAGR of 11.0% from 2017 to 2021. According to research, in 2016, the sales volume of yellow marble slabs accounted for approximately 41.9% of China’s total marble slab sales volume. The sales volume of yellow marble slabs in China increased from 73.1 million m2 in 2012 to 218.2 million m2 in 2016, representing a CAGR of 31.4%, and it is expected to keep increasing at a CAGR of 17.2% from 2017 to 2021. The sales volume of grey marble slabs in China grewfrom 22.0 million m2 in 2012 to 56.6 million m2 in 2016, representing a CAGR of 26.6%, and it is expected to keep growing at a CAGR of 16.1% from 2017 to 2021, to reach 119.9 million m2 in 2021. The sales volume of red marble slabs in China increased from 15.0 million m2 in 2012 to 41.8 million m2 in 2016, representing a CAGR of 29.2%, and it is expected to keep increasing at a CAGR of 15.7% from 2017 to 2021.

Future opportunities

China’s accelerated urbanization process and the Chinese government’s continuing investments in infrastructures and public facilities, including transportation infrastructures like airports and high-speed rail stations and public facilities like libraries, museums and hospitals, generate demand for architectural decoration. In addition, the Chinese government has taken initiatives to reduce real estate inventory in over 150 PRC cities where the local governments had not implemented policy to limit the purchase of real estate, including cities in Fujian and Guizhou provinces such as Guiyang (贵阳), Quanzhou (泉州), Zhangzhou (漳州), Longyan (龙岩), Putian (莆田), Nanping (南平), Jinjiang (晋江), Zunyi (遵义) and Bijie (毕节). The reduction of real estate inventory promotes transaction volume of real estate properties, which in turn creates demand for marble products as fine materials for home decoration. Meanwhile, as customers’ awareness of marble products continues to increase, marble products will have increasingly wide applications. China’s economic growth continues to create momentum for the marble industry in China. According to China’s 13th Five-Year Stone Industry Development Plan (《石材行业「十三五」发展规划》), China will develop a marble industry that is more focused on quality improvement, consumption structure upgrading and new market expansion. Stone product demand structure will continue to get upgraded, and personalized and diversified products and overall solutions for stone decoration will develop. The Chinese government will enhance the planning of the stone industry, encourage creative design and technology innovation of marbles, optimize marble industrial structure, promote the stone industry’s “Internet Plus” business and promote environment-friendly development of the stone industry.