Brussels has been accused of driving building businesses across Europe to the brink of insolvency after imposing antidumping duties on imports of Russian birch plywood.
The anti-dumping duty – which adds a charge of as much as 15 percent to Russian birch plywood – risks piling more pressure on companies already reeling from chronic supply shortages and battling a surge in inflation, according to a letter signed by more than 100 companies.
Officials imposed the anti-dumping tariff following an investigation into a surge in cheap Russian birch plywood exports, amid fears producers from the country were flooding the European Union market and pricing out domestic rivals.
On 7 October, the Birch Plywood Alliance sent a letter to the Commission expressing regret that the antidumping duties proposed by the European Commission on Russian birch plywood.
The combined effect of shortages, potential duties, and the incessantly increasing prices will be hard-hitting, the letter says. Therefore, the Alliance urges the Commission to suspend the proposed anti-dumping duties should they get adopted by the Member States.
The text of the letter:
The Birch Plywood Alliance, representing 133 members from 25 EU Member States, regrets the antidumping duties proposed by the European Commission on Russian birch plywood. The proposal simply does not consider the ongoing price hike, the resulting market turbulence, the current raw materials shortage, and – above all – the fact that duties will hurt EU users of birch plywood and European companies.
Continuing the trend from the last months, the average price for birch plywood has risen throughout September. As a result, compared to July 2019 average plywood prices have increased by 270%, from 485 EUR/m3 to 1305 EUR/m3.1 This does not come as a surprise, as it is expected for global timber prices to continue increasing for the foreseeable future. For example, the World Bank forecasted that timber prices keep climbing at least until 2024.2
The market dynamics causing the price increase are structural, the main factor being the rise in demand from the construction sector. Following the Commission’s emphasis on using wood products in the Green Deal, Renovation Wave Communication, and Forestry Strategy for 2030, Europe’s public policies will only reinforce this trend. For example, France already requires half of the materials used to construct public buildings to be wood or other natural substances.
The price hike is an enormous cost burden on European companies, including users of birch plywood, most of which are SMEs. Timber shortages have hampered business, stalled construction projects and left importers, distributors and users in the dark. In Belgium, 80% of companies active in the timber sector are affected by the shortages. Two thirds of the companies show delays of two weeks, and one third have delays of at least one month.
Moreover, EU users do not have alternatives to birch plywood. Other raw materials do not have the same technical characteristics and switching raw materials cannot be done without making major investments. For many of our members the entire production machinery – i.e. whole factories – would have to be replaced or restructured.
For these reasons, and the evidence provided during the consultations, we urge you to suspend the proposed anti-dumping duties. The combined effect of shortages, potential duties, and the incessantly increasing prices will be hard-hitting. A suspension might be the only respite for the EU’s birch plywood importers, distributors and end-users.