Will China Dump Furfural?


The European Commission may extend an anti-dumping fee on furfuraldehyde imports from China to address producer concerns that dropping the levy would swamp the EU market with lower-cost imports of the solvent, which is used in lubricant base oil production.

The EU defines dumping as exporting a product to the EU at prices lower than the normal value of the product – the domestic prices of the product or cost of production – in its own domestic market. Anti-dumping measures consist of duties paid by the importer in the EU, and collected by the national customs authorities of the EU countries concerned.

The EU imposed an anti-dumping duty on furfural imports from China in January 1995. Following reviews, the duty has been extended twice, in 1999 and 2005.

On Jan. 28, producers Lenzing AG of Austria and Tanin Sevnica kemicna industrija of Slovenia requested a review. The companies account for more than 50 percent of EU production of furfural. According to the announcement in the EUs Official Journal April 27, the two manufacturers believe, should measures be allowed to lapse, the current import level of the product concerned is likely to increase due to the existence of unused capacity in the country [China] concerned. The European Commission plans to conclude its investigation within 15 months of the April 27 notice.

The EU Councils April 2005 regulation outlined the unused capacity in China. The total Chinese production of furfuraldehyde is about 180,000 tonnes per year, which is more than four times higher than the total community consumption of furfuraldehyde, the EU Council noted in 2005. The Chinese capacity utilization rate is said to be around 70 percent, which means that there is idle capacity of around 50,000 to 60,000 tonnes per year in the PRC, i.e., more than total consumption in the community. The regulation noted more than 80 furfural production plants operated in China, mainly in the northeast part of the country.

In the 2005 regulation, the council also pointed out Chinese production constantly changed in accordance with need, so some plants closed for temporary periods and then reopened when needed. Consequently, the large production capacity available in the [Peoples Republic of China] and the flexibility with regard to reopening plants demonstrate that producers are able to quickly increase production and direct it to any export market, including, if the measures were to be repealed, to the [EU] Community market.

Furfural is obtained by processing different types of agricultural waste. According to the EU Commission, the liquid has two main applications – as a selective solvent in petroleum refining for production of lubricating base oils, and as raw material for processing into furfuryl alcohol, used to make synthetic resin for foundry molds.

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