European hardwood plywood producers are celebrating the imposition of up to 62.4% provisional anti-dumping duties on Chinese hardwood plywood imports by the European Commission.
However, many EU plywood importers and the Chinese plywood manufacturing sector have lobbied heavily against such a move.
The provisional duties were imposed on June 11 after the official decision was posted in the Official Journal of the EU the previous day.
EU plywood producers had originally made a complaint – via the Greenwood Consortium on August 27, 2024, – that they were suffering due to cheaper Chinese hardwood plywood products being exported to the EU. A European Commission investigation started on October 11, 2024.
The Commission’s report agreed that the EU hardwood plywood manufacturing sector had been injured by the Chinese imports.
“The current level of profitability of the Union industry is unsustainable,” the EU concluded.
“The imposition of measures is expected to allow the Union industry to raise sales prices and regain its profitability.”
A provisional anti-dumping duty rate of 62.4% is being imposed on PRC hardwood plywood imports, except for the manufacturer Pizhou Jiangshan Wood Co Ltd which will have a 25.1% rate.
“The individual company anti-dumping duty rate specified in this regulation was established on the basis of the findings of this investigation.”
After initiation of the investigation, the complainant, individual importers and the Plywood Trade Interest Alliance made several submissions on the evidence in the complaint relating to dumping, injury casualty and the Union interest.
The Commission also received comments from the China National Forest Products Industry Association and several Chinese exporting producers.
The exhaustive investigation – covering the trading period of 1 July 2023 to 30 June 2024, considered wood species, particularly poplar logs and eucalyptus veneers, industry production output, prices, workforces and energy.
The focus was plywood consisting solely of sheets of wood other than bamboo and okoumé, each ply not exceeding 6 mm thickness, with at least one outer ply of tropical wood or non-coniferous wood, of species specified under subheadings 4412 31, 4412 33 and 4412 34, whether or not coated or surface covered.
The 59-page decision report said imports into the EU from China during the investigative period were 794,899m3, with a market share of 31%. In 2023 the figure was 750,083m3(market share – 30%); in 2022 imports were 900,104m3 (26%); and 2021 the figure was 683,984m3 (18%).
Imports of hardwood plywood from China increased overall by 16% during the period considered. Imports peaked earlier in 2022, when an increase of 32% was recorded compared to 2021 volumes.
The substitution of products originating from Russia and Belarus was one of the reasons for the increase.
Import prices of the Chinese product were €418/m3 during the investigation period, down from a high of €529/m3 in 2022.
EU hardwood plywood production in the investigation period was 1,664,963m3, with an installed production capacity of 2,538,000m3 – a capacity utilisation rate of 66% (down from 74% in 2022). EU producers say they were forced to reduce their production output from 2022 due to the expansion of cheaper Chinese products.
The average sales unit price of the EU-made product on the market was £1,023/m3 during the investigation period, whereas the unit cost of production was €1,074/m3. Increased costs was a major reason for this.
The average EU sales price increased by 41% over the period considered, but the unit production costs increased by 57%.
Starting in 2023, the Union industry was unable to raise its sales prices to cover these increased costs due to price pressure from Chinese imports, so EU producers went from a profit-making situation in 2021 and 2022 to a significantly reduced profit in 2023 and -2% losses in the investigation period.
The investigation found that 615,248m3 of product was imported to the EU from other countries, including 113,501m3 from Kazakhstan (4% market share).
The EU industry is comprised of around 26 companies, 17 of which supported the complaint. They employ 40,000 workers directly and indirectly.
They are located in Austria, Bulgaria, the Czech Republic, Estonia, Finland, France, Germany, Greece, Hungary, Italy, Latvia, Poland, Portugal, Romania, Slovakia, Slovenia, Spain and Sweden.
The Commission said the absence of any action would lead to further price suppression, sales reduction, more losses and the closure of production facilities and job losses.
Some 52 importers registered as interested parties in the investigation. Several argued that the EU plywood industry lacked the capacity to meet demand, and measures would create market shortages.
They also said high prices resulting from duties could not be passed onto customers and would drive them out of the market. EU producers, they added, were not interested in supplying certain types of hardwood plywood.
However, the Commission viewed the risks as limited and believes EU producers have capacity to increase production. It also said there were many other sources other than China.
No decision on a possible retroactive application of anti-dumping measures has been taken yet.
Poland-based Paged Plywood welcomed the decision.
“This move is a clear stance in defence of fair competition and against long-standing practices of price dumping and customs circumvention by Chinese exporters,” it said.
Read the full statement and EU regulation HERE
