European Union Imposes Tariffs on Chinese Melamine

The European Union imposed a five-year tariff on melamine from China to help Polish, Dutch and Austrian producers compete with cheaper imports, threatening higher costs for EU wood-panel makers that use the material.

The duty of 415 euros ($593) a metric ton punishes Chinese exporters of melamine for selling it in the EU below cost, a practice known as dumping. The levy aims to reduce competition for Zaklady Azotowe Pulawy, OCI Melamine and Borealis Agrolinz Melamine, three EU melamine producers that requested anti-dumping protection in January 2010.

EU manufacturers suffered "material injury" as a result of dumped imports of melamine from China, the bloc said in a decision Tuesday in Brussels. The five-year duty will take effect after being published in the EU Official Journal by May 17.

Europe's 400 million-euro market for melamine is testing the 27-nation EU's ability to balance the interests of producers and consumers when weighing the impact of imports. Melamine is a raw material used in resins that strengthen and protect wood surfaces of furniture, panels and floors.

Pulawy, OCI Melamine and Borealis Agrolinz Melamine account for about 90 percent of EU melamine production and together employ around 600 people in that business, which mainly serves the building and furniture markets.

China is the main foreign supplier to the European market ahead of Iran and Saudi Arabia. The EU is the world's biggest melamine market.