The EU renewed the anti-dumping duties imposed on imports of okoumé plywood manufactured in China on 13 June 2023. These duties were originally introduced by the EU in 2004 and would have lapsed after only five years had not an interested party requested the European Commission (EC) to initiate an expiry review. Since then, the European Panel Federation (EPF) has requested that the EC review the duties every five years, most recently in December 2021. On each occasion this has led to the announcement of another 5-year extension. The request for review was based on the grounds that the expiry of the measures would be likely to result in recurrence of dumping and injury to the EU industry.
The duties renewed on 13 June are unchanged from those originally imposed in November 2004, requiring payment of between 6.5% and 23.5% by four named Chinese manufacturers and 66.7% by all other Chinese manufacturers. The four manufacturers paying lower duties had co-operated during the original anti-dumping investigation and shown that the “injury-margin” for their products was less than calculated by the EU for other Chinese manufacturers.
Signs of greater resilience in EU okoumé plywood manufacturing sector
The review investigation carried by the EC – which focuses on the years 2018 to 2021 – is interesting for the insight it provides into the current extent and status of the EU okoumé plywood manufacturing sector. The previous review published in April 2017 suggested that the EU sector was extremely fragile at that time, suffering from very low profit margins, weak demand, and negligible levels of investment. The latest review suggests that while the EU sector is much reduced from the period prior to 2010, and profitability is still low, its overall position has stabilised and is more resilient.
The product covered by the anti-dumping duties and investigated by the EC is that falling within TARIC code 4412 31 10 10 and defined as “plywood consisting solely of sheets of wood, each ply not exceeding 6 mm thickness, with at least one outer ply of okoumé not coated by a permanent film of other materials”. This definition captures both “full okoumé” plywood with okoumé throughout and combi plywood with at least one outer face of okoumé, the rest being made of other wood.
The product is used for a variety of end-uses in the EU, notably exterior joinery and carpentry applications for boarding, shutter boards, exterior basements and balustrades and riverside panelling, and more decorative purposes particularly in vehicles and yachts, and for furniture and doors.
The EC investigation involved a review of relevant trade and industry statistics and consultation with interested parties. Invitations to participate were issued to all known exporting producers in China but none responded with information.
As a result, the analysis relied heavily on questionnaire responses from three sampled plywood producers in the EU and from the EPF. The analysis also identified Türkiye as a suitable “analogue” country against which to compare Chinese production, drawing on publicly available data for one Turkish okoumé plywood producer, and information from Türkiye’s national statistics office.
Summary data from the EC’s review analysis on EU production and trade in okoumé plywood between the years 2018 and 2021 is shown below:
|Total EU okoumé plywood consumption (m3)||171309||187104||171737||192264|
EU production of okoumé plywood
|Production volume (m3)||164635||179457||164383||174048|
|Production capacity (m3)||286965||299163||288272||306816|
|Capacity utilisation (%)||57.4||60.0||57.0||56.7|
|Sales volume to unrelated customers (m3)||145909||156770||143287||155460|
|Market share (%)||85.2||83.8||83.4||80.9|
|Closing stocks (m3)||5805||3762||4793||4245|
|Average sales price (EUR/m3)||956||959||987||1033|
|Unit cost of production (EUR/m3)||939||922||978||1011|
|Number of employees||678||664||661||663|
|Profitability of sales to unrelated customers (% of sales turnover)||2.5||3.9||3.3||6.9|
|Return on investments (%)||3.6||6.9||6.9||18.2|
EU imports of okoumé plywood from China
|Market share (%)||0.06||0.00||0.03||0.04|
|Average import price (EUR/m3)||370||0||481||619|
EU imports of okoumé plywood from Gabon
|Market share (%)||10.9||10.6||10.6||12.6|
|Average import price (EUR/m3)||761||745||755||769|
EU imports of okoumé plywood from Morocco
|Market share (%)||3.6||4.5||4.8||5.2|
|Average import price (EUR/m3)||852||833||846||870|
EU imports of okoumé plywood from other third countries
|Market share (%)||0.3||1.0||1.1||1.3|
|Average import price (EUR/m3)||526||867||710||938|
The EC’s analysis shows that EU consumption of okoumé plywood increased from 171,300 m3 in 2018 to 192,300 m3 in 2021 (a short-term dip to 171,700 m3 is explained by the pandemic). Although a positive recent trend, consumption is still a long way behind an annual level of around 290,000 m3 during an earlier EU review in 2008-2009. China’s share of the market was negligible between 2018 and 2021, as it was during the previous review covering the 2012-2015 period.
EU production of okoumé plywood was 164,600 m3 in 2018 rising to 174,000 m3 in 2021. Capacity utilisation was between 56% and 60% during this period. This compares to production of around 146,000 m3 per year with capacity utilisation of 80% during the previous 2012-2015 review period. This indicates a solid recovery in both production volume and capacity between 2015 and 2021. However, capacity is still well below a level closer to 600,000 m3 in the 2008-2009 period.
EU manufacturers share of the EU market for okoumé plywood decreased from 85% in 2018 to 81% in 2021. Share was lost primarily to imports from Gabon and Morocco. However, in this instance the longer-term trend is more positive for EU manufacturers whose share of the market was only around 70% during the 2012-2015 period. Employment in the EU okoumé plywood manufacturing industry remained stable at around 670 people between 2018 and 2021, but this was a significant rise from less than 500 in 2015.
Sales prices of okoumé plywood manufactured in the EU increased from 956 EUR/m3 in 2018 to 1033 EUR/m3 in 2021. These prices are considerably higher than the 2012-2015 review period when they were around 770 EUR/m3. Over the long term though, they represent only moderate gains – and a significant decline in real terms when account is taken of inflation – compared to around 900 EUR/m3 during the 2008-2009 period. Furthermore, the prices achieved between 2018 and 2021 are only just sufficient to cover the unit costs of production which increased from 939 EUR/m3 in 2018 to 1011 EUR/m3 in 2021. Profitability on sales is therefore still low, though it did increase from 2.5% of turnover in 2018 to 6.9% in 2021.
Loss of EU manufacturers’ share of the market between 2018 and 2021 was at least partly due to higher prices compared to competitors in Gabon and Morocco. Average prices for EU imports of okoumé plywood from Gabon were relatively stable at around 760 EUR/m3 between 2018 and 2021, while prices from Morocco increased from 850 EUR/m3 to 870 EUR/m3 during the same period.
The EC compared EU sales prices of domestic, Gabon and Moroccan manufacturers during the review period with commercial offers solicited from Chinese manufacturers by email for delivery to the EU and other third countries (in the Middle East, Türkiye, and the United Kingdom). These prices were, at CIF level, 686 EUR/m3 for full okoumé and 458 EUR/m3 for faced okoumé for the EU market, and 371 EUR/m3 for faced okoumé for third countries. The EC concluded that prices offered by Chinese manufacturers for okoumé plywood were substantially less than both EU manufacturers and manufacturers in other third countries.
Chinese okoumé plywood would switch to EU market without anti-dumping measures says EC
The EC was unable to accurately assess the level of China’s okoumé plywood production during the review period and therefore only examined the situation of the whole Chinese plywood industry regardless of the type of wood species used.
On this basis, according to the EC, “significant production capacity potentially available in China is indicated by the production volumes of all types of plywood, which, based on the latest available FAO statistics, accounted for 76.4 million m3 in 2021”. The EC also estimated total plywood production capacity in China at 270 million m3 per year at the end of 2021.
The EC concluded that “Given the large production capacities in the PRC, that dwarfed the EU demand of 192000 m3 in the review investigation period (2021) regardless of the figure taken, and that only a change from other types of wood to okoumé is needed to produce okoumé plywood, there is a high likelihood that Chinese producers would use their large production capacity to shift their production from other types of plywood towards the more lucrative okoumé plywood for export to the Union if the measures expire”.
The EC also suggested that the EU market would be “attractive” to plywood manufacturers in China since, during the review period, “Chinese exports prices of okoumé plywood to the Union market were higher than the Chinese export prices to all other third markets for which commercial offers were available. Namely the export price offers at CIF level to the Union market were, on average, 23% higher than export prices to third countries at CIF level”.
The EC also note that other consuming countries are implementing “trade defence measures” on imports of Chinese plywood, including: the Republic of Korea (anti-dumping measures on plywood with at least one outer ply of tropical wood: of a thickness less than 3,2 mm); Morocco (anti-dumping measures on all plywood); USA (anti-dumping and countervailing measures on hardwood plywood); and Türkiye (anti-dumping measures on certain types of plywood).
According to the EC “These measures contribute to export limitations for Chinese plywood producers and to the existence of sustained significant spare capacity of plywood in China and render the Union market more attractive for Chinese plywood imports”.
The EC concluded that “there is a strong likelihood that dumping would recur if the current measures were allowed to lapse. In particular, the level of the normal value established in the PRC, the level of Chinese export prices to third country markets and the Union, the attractiveness of the Union market and the availability of significant production capacity in the PRC all point to a strong likelihood of recurrence of dumping in case the current measures would be allowed to lapse”.
Details of the EU’s decision to the anti-dumping measures, including the full investigation, are available at: https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:32023R1159
European wood-based panel production falls nearly 8% in 2022
Total European wood-based panel production reduced by 7.8% in 2022, according to a report by the UK Timber Trades Journal (TTJ), drawing on figures just released by the European Panel Federation (EPF). The output, relating specifically to EPF member countries, totalled 59.8 million m3. Consumption of wood-based panels followed a similar pattern, with a reduction of 7% (60.8 million m3) compared to 2021.
The TTJ derived the figures – which are contained in the newly-published EPF Annual Report 2022-2032 – from comments made by Clive Pinnington, EPF managing director, to the EPF AGM and conference in Santiago de Compostela in Spain on 23 June which was attended by about 200 representatives from the global wood-based panels industry.
According to the TTJ, Mr Pinnington also told delegates that essentially 2022 H1 had an “OK” performance, but H2 was “not quite a catastrophe, but nearly”, with the furniture industry in particular suffering in H2 with a 5% reverse.
The EPF figures quoted by the TTJ show that European particleboard production reduced 6.9% in 2022 to 32.1 million m3. However, European particleboard production capacity increased by 1% in 2022 and is expected to rise by another 3.3% this year. MDF suffered a more severe production output decline in 2022 with a 9.3% dip to 12.5 million m3, though TTJ note that the comparison year (2021) had seen a sharp rise in output of 7.7%. The OSB sector saw a 10.7% decline in production to 6.4 million m3, while softboard (predominantly wood fibre board insulation) suffered an 8.9% reverse to 5.1 million m3. European plywood production was down by 2.5% in 2022 to 3.1 million m3.
According to TTJ, again quoting the EPF, consumption of wood-based panels in the key furniture industry declined by 1% in 2022. The furniture industry consumed 48% of all wood-based panels last year, down from 49% in 2021.