Fortress Paper (TSX:FTP) says it’s considering legal challenges to China’s new duty on a type of Canadian wood pulp used to make cloth, cellophane, tires and other products.

As anticipated, China’s Ministry of Commerce has set a 13 per cent interim anti-dumping duty, which will increase the price of dissolving pulp from Fortress and make it less competitive.

The company’s shares, already down substantially from their 2013 high of $12.08, declined even further to the lowest level in more than a year. They were at $5.15 in late morning trade.

The Vancouver-based company said early Wednesday that it disagrees with China’s decision which Fortress says “represents an unsupported assessment of injury to China’s dissolving pulp market and the allegations of ‘dumping’ activities by Canadian producers.”

Under international trade rules, dumping refers to selling exported goods below prices in the producer’s home market. Under WTO rules, duties can be applied by importing countries if the dumping is harming their domestic producers.

Fortress says it has 10 days to make an initial decision on its options, which including challenging the duty, a lengthy process that could take years if it goes to the World Trade Organization.

In the meantime, the company will have its Fortress Specialty Cellulose mill in Quebec also make kraft pulp for paper-making.

The plant near Ottawa was converted from paper grades in 2011 just after prices peaked for dissolving pulp.

Since then, China’s economic growth has slowed and dissolving pulp prices have plummeted by more than a third to about US$880 per ton, while paper and specialty pulp prices have surged.

In addition to fetching lower prices, dissolving pulp is more costly to produce because it uses more fibre and chemicals, while the extra processing time also reduces output by up to 25 percent.

Fortress said Wednesday that it anticipates that the adverse impact of any dumping tariff will be of a short duration as trade patterns realign and global dissolving pulp prices normalize over the long-term.

The company says it is also working to expand its dissolving pulp sales network outside of China to secure the best pricing for its dissolving pulp and further mitigate the impact of the duty.

On the Toronto Stock Exchange, Fortress shares fell below the previous 52-week low of $5.48. They were down as much as 51 cents during the day, hitting $5.12 at the lowest point Wednesday.