USITC Staff Report: Quartz Surfaces from India and Turkey staff report USITC | Page 38

a new emerging substitute that competes with quartz surface products in the higher end
market for countertops, flooring, shower walls, fireplaces, and facades. 13
Joint respondents MS International and Arizona Tile argued that substitutes, such as
other natural stone products like granite and marble, act as a limit on producers’ ability to raise
prices, with the exception of Cambria because “it does not compete in the unbranded, mass
market.” 14
Substitutability issues
The degree of substitution between domestic and imported quartz surface products
depends upon such factors as relative prices, quality (e.g., grade standards, defect rates, etc.),
and conditions of sale (e.g., price discounts/rebates, lead times between order and delivery
dates, reliability of supply, product services, etc.). Based on available data, staff believes that
there is a moderate-to-high degree of substitutability between domestically produced quartz
surface products and quartz surface products imported from subject sources. 15
Lead times
Quartz surface products are primarily sold from inventory. U.S. producers reported that
94.2 percent of their commercial shipments came from inventory, with lead times averaging 6
days. The remaining 5.8 percent of their commercial shipments were produced-to-order, with
lead times averaging 84 days. U.S. importers reported that 95.8 percent of their commercial
shipments came from U.S. inventory, with lead times averaging 5 days.
Knowledge of country sources
Twenty-three purchasers indicated they had marketing/pricing knowledge of domestic
product, 9 of Indian product, 6 of Turkish product, and 22 of nonsubject countries.
13
U.S. producers *** reported porcelain as one of the main substitutes for quartz surface products.
14
Joint respondents MS International and Arizona Tile’s responses to the first round of
Commissioners’ questions, p. 15.
15
Many importers reported that domestic and subject quartz surface products were not
interchangeable due to differences in color offerings, quality, and market segment which each source
targeted. According to importers’ responses regarding interchangeability and factors other than price,
domestic quartz surface products are considered luxury or high-end, while subject imported quartz
surface products are more commonly used in mass market applications. Importers reported that
domestic producers offered different color varieties. However, U.S. producers and importers reported
that the type of sale, end uses, and lead times between domestic and subject quartz surface products
were similar and purchasers reported that price was fourth in top factors affecting purchasing decisions.
II-12