China’s real estate market continues to decline, impacting the ceramic and building materials industries. In the past month, at least 8 ceramic enterprises nationwide have applied for bankruptcy liquidation, with 2 of them located in Foshan, Guangdong. Foshan, known for its ceramics, has seen some ceramic companies announce unpaid furloughs to clear excess inventory.
According to statistics from the ceramic industry media and the national enterprise bankruptcy reorganization case information network, from May 20 to June 23, 2025, at least 8 ceramic enterprises nationwide entered bankruptcy proceedings, including Xinxin Ceramic in Xinjiang, Qiang Ceramic Technology in Xinjiang, Zhitaoceramics in Xinxing County, Wutao Machinery in Xiangtan, Xinshun Ceramic in Anyang, Zhongtao Ceramic in Jiangxi, and Meier Ceramic and Yitao Ceramic Import and Export Company in Foshan. Among them, Meier Ceramic in Foshan was declared in bankruptcy by the Gaoming District Court in Foshan on May 27 due to debt concentration issues.
Mr. Zhong, a ceramic factory manager in Shiwan Town in Foshan, told reporters on July 17 that at least 5 ceramic enterprises in Guangdong’s ceramic production area had closed in the first half of the year. He stated, “The fundamental problem is overcapacity and insolvency. There are almost no orders, warehouses are full of tiles, and monthly warehousing costs are over 10,000 RMB. Many companies have implemented 4 months of unpaid leave starting from July 1, with a reassessment of resuming work in October, but no one can be sure if they can make it through.”
Data from the ceramic industry indicates that in the first half of 2025, only 18 new or technically renovated ceramic kilns were put into operation nationwide, more than half less compared to the same period last year. Data released by Zhongtao’s website shows that Foshan’s wall and floor tile production decreased by 13.3% year-on-year, with a firing rate of only 60%, reflecting the industry’s downturn.
By the end of 2024, Foshan had a total of 27 construction ceramic production enterprises, owning 138 production lines, including 135 ceramic tile production lines and 3 ceramic tile production lines; with a daily average production capacity of 1.728 million square meters of ceramic tiles and 135,000 ceramic roof tiles.
While production is significantly shrinking, many ceramic enterprises are resorting to asset auctions to seek self-rescue. Three weeks ago, the administrator of Jianci Ceramics Limited in Qingyuan also auctioned the company’s over 70,000 square meters of land and more than 20 above-ground buildings located in Heyun Town, Qingxin District on JD auction platform, but it ended up unsold.
In addition, the administrator of Xinshun Ceramic Limited in Guangdong announced the public auction of the company’s land use rights, above-ground buildings, equipment, vehicles, trademarks, and accounts receivable on Taobao Alibaba bankruptcy asset auction platform on July 20.
The ceramic industry, being an energy-intensive industry, is facing the double pressures of plummeting orders and high costs, particularly challenging for small enterprises. Mr. Wu, a manager of a ceramic enterprise in Yunfu, Guangdong, pointed out, “With the rising natural gas prices and bank loan pressures, small manufacturers can barely survive. Large enterprises can lay off employees and reduce production lines, but small ceramic enterprises have no room for maneuver, and many are forced into bankruptcy.”
The current market adjustment has intensified the reshuffling trend in the ceramic industry. Wu stated that it is widely believed within the industry that traditional production areas like Foshan are undergoing a phase of deep integration, with the likelihood of further expulsion of small and medium-sized enterprises in the future.
Huang Ke, a China real estate developer who fled overseas, stated that the construction industry and the ceramic industry have always been closely linked. Ceramic tiles are widely used in interior decoration such as kitchens, bathrooms, and window sills, with market demand highly dependent on real estate development. “But now, with sluggish housing sales and a significant decrease in new construction projects, the demand for renovations has plummeted sharply, resulting in unsold ceramic tiles.”
Meanwhile, China’s ceramic product export is also facing challenges. Huang Ke mentioned that influenced by factors such as the China-US trade friction, cooling overseas real estate markets, and weak global economic recovery, foreign orders have significantly dropped. “With domestic sales sluggish and foreign trade declining, mainland ceramic manufacturers are almost caught in the middle.”
He admitted that the current ceramic industry, like the real estate sector, which was once booming, is now no longer thriving and is experiencing an unprecedented winter.