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ADC investigates new paper dumping case

Friday, 23 March 2018
By Graham Osborne

A paper machine at Australian Paper’s Maryvale mill.

The Federal Government’s Anti-Dumping Commission (ADC) is investigating allegations that five countries including Russia and South Korea are dumping copy paper onto the Australian market.

In an application for a dumping notice, Australia’s only office paper manufacturer Australian Paper told the ADC that the local A4 copy paper market has suffered “material injury” caused by cheap A4 copy paper exported to Australia from Austria, Finland, the Republic of Korea, the Russian Federation and the Slovak Republic.

In a preliminary report, the ADC said: There appear to be reasonable grounds to support the claims that the Australian industry has experienced material injury in the form of: price depression; price suppression; loss of revenue; loss of profits; reduced profitability; and reduced return on investment.

The commission says it will now investigate exports to Australia between 1 January 2017 to 31 December 2017 to look for evidence of dumping. It also intends to examine the Australian market from 1 January 2014 for “injury analysis purposes” to see whether the dumped goods provide a basis for a dumping duty notice to apply retrospectively.

‘We welcome the ADC’s decision to investigate this important issue’: Peter Williams, Australian Paper.

Australian Paper welcomed the ADC’s decision to begin an investigation. “Australian jobs and the future of the local industry continue to be under threat from low market prices,” says Peter Williams, COO Australian Paper.

“The Australian office paper market remains intensely competitive with imports continuing to be received from around the world. Australian Paper remains committed to competing equitably against imported paper and will continue to focus on the efficient manufacture of innovative, high quality, Australian made products,” Williams says. “However, market pricing remains at commercially unsustainable levels due to the impact of low priced imports.

“The ADC’s investigation into office paper from Austria, Finland, Korea, Russia and Slovakia will determine whether manufacturers from these countries are operating fairly in this market. We look forward to the ADC’s determination as to whether office paper from these countries is being sold into this market at dumped prices.”

In April 2017, the ADC imposed dumping duties on A4 copy paper exported to Australia from Brazil, China, Indonesia and Thailand after a similar complaint from Australian Paper. The company argued that cheap imports sold below the cost of production were threatening jobs at its Maryvale mill in the Latrobe Valley, where market-leading Reflex brand A4 copy paper is produced. Indonesia later threatened to sue the Australian government over the dumping duties.

Australian Paper says it gained market share last year as a result of the measures imposed against imports from Brazil, China, Indonesia and Thailand (see chart below).

Not surprised: Tim Woods, MD IndustryEdge.

Industry analyst Tim Woods, managing director of IndustryEdge, says he’s not surprised to see new dumping allegations before the commission.

“After last year’s clear decision by the ADC, any hint of dumping from other countries was always going straight back to the ADC. Very low priced copy paper imports have made it difficult for Australian Paper to provide price leadership, despite the rising price of pulp across the world.

“Since the start of 2018, all imports of A4 copy paper have been made confidential in the trade data so there is no longer any ‘look through’ to any copy paper import volumes or prices, for any country,” says Woods. “Removing trade transparency isn’t evidence of dumping, but in our experience, the masking of basic data is often mixed up with dumping cases.”

Australian Paper – owned by Japan’s Nippon Paper Group – is one of the largest employers in Victoria’s Latrobe Valley and contributes over $900 million to Australia’s GDP annually. The company recently was hit by an eight-week strike at its envelope-making factory at Preston in Melbourne.

Read the full ADC report number 463/Application for a dumping duty notice here.

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