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The European Commission is unable to accurately assess the level of China’s okoumé plywood production. A rough estimate using information provided by the European Panel Federation (based on the volume of okoumé logs imported into China in 2014), put annual production at somewhere between 290,000 cu.m and 2.9 million cu.m per year.

The large range is because of lack of data on how much imported okoumé is destined for plywood production in China, or is used for full okoumé plywood or combi plywood. Nevertheless, the EC suggested, based on this data, that okoumé production capacity in China is likely to be significantly greater than in the EU.

The EC also noted plywood in China is produced by the same companies and on the same equipment, whatever the wood species used and that okoumé plywood tends to be more profitable than other types of plywood. Therefore, according to the EC, in the absence of anti-dumping measures, “it is likely that Chinese producers will shift their production from other types of plywood towards the more lucrative okoumé plywood”.

The EC also noted that anti-dumping duties on imports of Chinese plywood exist in the Republic of Korea, Morocco and Turkey, while the U.S. issued a preliminary determination of the countervailing measures against Chinese plywood in January 2017.

The EC suggested that “Chinese exporting producers thus will have limited access to these markets and will be limited in exporting their production or re-directing their exports to these markets. This leaves the EU market even more attractive for Chinese plywood imports”.

The EU review concluded: "the significant production capacity available in China, the possibility of Chinese producers to easily increase production volumes available for exports, the possible high dumped prices in other third markets as well as in the Union market and the attractiveness of the Union market, indicate that a repeal of the measures would likely result in Chinese exporting producers re-entering the Union market at dumped prices and in significant quantities.

It is therefore considered that there is a likelihood of recurrence of dumping should the current anti- dumping measures be allowed to lapse."

The data gathered by the review investigation carried by the EC – which focuses on the years 2012 to 2015 shows that EU consumption of okoumé plywood ranged from 175,600 cu.m to 189,000 cu.m per year in the period 2012 to 2015, a substantial decline from around 290,000 cu.m during the EU’s previous review in 2008-2009.

The EC comments that the decrease was explained by okoumé plywood being substituted by other tropical wood species and by the fallout from the economic crisis. The share of China in the market during this period when antidumping duties were in place was negligible

EU production of okoumé plywood was 144,000 cu.m in 2012 rising to 148,000 cu.m in 2015. Capacity utilisation was 80% throughout this period. This compares to annual production of around 265,000 cu.m in 2008 and 2009 reported in the previous review.

Production capacity in the EU, which was 577,000 cu.m in the previous review period, fell even more dramatically due to the closures of several EU producers, including Plysorol formerly the largest EU manufacturer, and reduced capacity by those producers still in the business.

EU producers share of the EU market increased from 68.2% in 2012 to 74.9% in 2015, almost all at the expense of producers in Gabon and Morocco. The EU okoumé plywood manufacturing industry employed 543 people in 2012, declining to 492 in 2015. Production per employee increased by 13% from 265 cu.m in 2012 to 300 cu.m in 2015.

Sales prices of okoumé plywood manufactured in the EU averaged 756 EUR/cu.m in 2012 rising to 780 EUR/cu.m in 2015. These prices are considerably lower than levels of around 900 EUR/cu.m recorded in the previous review during 2008-2009.

The prices achieved recently are insufficient to cover the unit costs of production which averaged 783 EUR/cu.m in 2012, fell to 760 EUR/cu.m in 2013 and 2014, before rising to 778 EUR/cu.m in 2015.

The EC notes that during the whole 2012-2015 period, profitability of the EU okoumé plywood was extremely low. It was negative at the beginning of the period and turned only slightly positive in 2014 and 2015.

The level of profitability in 2015 was markedly lower even than in 2009 at the height of the economic crises.

Investment was also extremely low, below that required to compensate for depreciation of fixed assets in 2012 and 2013, and just rising above this level in 2014 and 2015.

While EU manufacturers were gaining share at the expense of manufacturers in Gabon and Morocco in the period 2012 to 2015, the latter were selling product at lower average prices.

Average prices for EU imports of okoumé plywood from Gabon increased from 628 EUR/cu.m to 645 EUR/cu.m between 2012 and 2015, while prices from Morocco increased from 662 EUR/cu.m to 700 EUR/cu.m.

The EC compared sales prices of domestic, Gabon and Moroccan manufacturers in the EU during the review period with commercial prices offered by Chinese manufacturers to non-EU European countries (namely Bosnia and Herzegovina, Switzerland, Turkey, Gulf States and Norway). These prices ranged from 313 EUR/cu.m to 540 EUR/cu.m (CIF).

The EC also noted that the average CIF price of okoumé plywood supplied into the EU from China during a brief period in 2012 when imports from the country increased from negligible levels to over 1000 cu.m was 549 EUR/cu.m.

The EC concluded that prices offered by Chinese manufacturers for okoumé plywood were substantially less than both EU manufacturers and manufacturers in analogue countries.