BRUSSELS, Sept 24, 2015 (RISI) - The Turkish antidumping duties applied to American kraftliner imports in July have so far had limited concrete impact on the European market but the development is likely to open new opportunities for European producers in that country, market experts polled by RISI said.
In mid-July the Turkish government adopted an antidumping tariff of 19.96% of the CIF value for imports of unbleached kraftliner below 175g originating in the US. The import duty for paper supplied by International Paper (IP) and Rock-Tenn was set at 9.43% and 15.06% of the CIF value, respectively. The measure is the result of an investigation following a complaint by the Turkish papermaker OYKA Kagit. OYKA operates a sole 100,000 tonne/yr PM which makes kraft paper and brown kraftliner in a light grammage range.
Several market players operating in Turkey and Europe said that while there is no clear picture yet of the implications of the new regulation for the European kraftliner market, there is little risk that American suppliers will increase their presence in Europe.
"There is no imminent impact [from the measure]. We foresee a marginal effect, if any, from this on the European market because we expect US suppliers to redirect part of their volume to markets closer to home, such as South America," one large European producer said. He added that he expects IP to continue supplying its corrugated plants in Turkey.
A couple of Italian kraftliner sellers in Italy suggested, however, that some additional volume is likely to be redirected to Italy.
"We understand that IP is pushing to supply all [the kraftliner] they cannot sell in Turkey to its Italian converting plants," a seller said, adding that American suppliers are also currently offering price decreases in that market for October production.
Turkish prices to rise: The antidumping measure will most likely lead to higher prices for liner in Turkey and increased demand for kraftliner substitutes, market sources said.
Contacts among corrugated packaging producers operating in Turkey said that kraftliner below 175g is quite popular, estimating that its share in overall American imports exceeds 60%. The overall import volume of US kraftliner to Turkey in 2014 is estimated at around 290,000 tonnes.
Converters now expect their costs to rise as domestic Turkish prices for kraftliner and kraftliner substitutes will increase.
"We now have to look for alternatives to replace US liner. It's a cost issue for us. Kraftliner is still available on the market but prices will undoubtedly rise. So we are looking into possible substitutes like testliner 1 and top liner which we could use for certain packaging applications," one large corrugator said.
Sources among European kraftliner producers said that the expected higher prices in Turkey will create new opportunities for them in that market.
"Demand for linerboard is still rising every year in Turkey. I expect this antidumping measure to increase demand for domestic high-quality testliner as well as kraftliner equally. No doubt, European suppliers will try to sell more to Turkey when prices grow, especially with the new [kraftliner] capacity on the horizon," one producer said.