Building Material - Tile Exports Remain Strong; MDF Imports Stay Elevated: ICICI Securities

ICICI Securities Report

Export-Import data for the month of October 2023 remains a mixed bag. Tile exports, at 52.6 million square metre, were up 69.3% YoY/flat month on month – GCC countries, USA and Iraq being the top export destinations with volume mix of ~18%, ~6% and ~6%, respectively.

Tile exports for April–October 2023 remained robust at 358 msm (plus 51.3% YoY) and are expected to continue on a strong footing driven by benign gas costs and freight rates. Medium density fibreboard import volumes remain elevated for October 2023 growing 106% YoY/slipping 1.6% month-on-month to ~27,600 tonne (in line with April–October 2023 monthly average), with Thailand (~45%), Vietnam (~31%) and China (~8%) being top markets for MDF import.

MDF imports remain elevated due to lower freight rates and subdued demand for furniture in developed markets, resulting in dumping in Indian markets; MDF imports are expected to remain elevated in the near term too until BIS norms are effected in February 2024.

PVC imports were up 93.2% YoY/3.6% month-on-month, while CPVC imports were down 37.4% YoY/up 17.1% month-on-month. Decorative laminate exports rose 22.4% YoY/9.2% .

We prefer Kajaria Ceramics Ltd. in tiles; Century Plyboard India Ltd. and Greenpanel Industries Ltd. in the woodpanel industry.

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