The subsidization of the CFP industry for Chinese producers could be a concern for EU markets, according to the European Commission

The European Commission (EC) has extended two punitive duties on imports of certain coated fine paper (CFP) from China, following conclusions in expiry reviews made on August 21.

In the European Union (EU), Chinese exporters have been subject to anti-dumping duties of 8-35.1% and countervailing duties of 4-12% since May 2011.

The product in question is CFP paper coated on one or both sides, excluding kraft paper or paperboard, in either sheets or reels with a weight of 70 g/m² or more, but not exceeding 400 g/m², and brightness of more than ISO 84. The review did not include reels suitable for use in web-fed presses, multi-ply paper or multi-ply paperboard.

Subsidization of the CFP industry a concern with shrinking global markets

The latest review was requested by Arctic Paper Gryckso, Burgo Group, Fedrigoni, Lecta and Sappi Europe in March 2022.

Because Chinese CFP imports into the EU were only 197 tonnes during the review investigation period, which covers the whole of 2021, the EC had therefore focused its probe on the likelihood of recurrence of dumping should the measures be allowed to lapse.

The EC ruled that on the basis of its review conclusion on recurrence of dumping, recurrence of injury and Union interest, the anti-dumping measures on CFP from China should be maintained.

Meanwhile, based on the available facts, the EC concluded that there was sufficient evidence that subsidization of the CFP industry in China continued during the review investigation and is likely to continue in the future. No evidence showed that the subsidies and subsidy programs at issue would be terminated in the near future.

According to the EC, the subsidization of the CFP industry allowed Chinese producers to maintain their production capacities at a level far exceeding domestic demand, in spite of shrinking markets in China and worldwide. Therefore, it found that the repeal of the countervailing measures was likely to result in a return of significant volumes of subsidized imports of the product concerned into the EU market.

This article was taken from PPI Asia, our newsletter for pulp, paper and packaging market news and prices for Asia. Speak to our team to learn more about our news and market analysis, prices, forecast and more.

Source: Fastmarkets