Commission Implementing Regulation (EU) 2025/325 of 18 February 2025 amending Implementing Regulation (EU) 2023/1776 imposing a definitive anti-dumping duty on imports of melamine originating in the People’s Republic of China, following a partial interim review pursuant to Article 11(3) of Regulation (EU) 2016/1036 of the European Parliament and of the Council

THE EUROPEAN COMMISSION,

Having regard to the Treaty on the Functioning of the European Union,

Having regard to Regulation (EU) 2016/1036 of the European Parliament and of the Council of 8 June 2016 on protection against dumped imports from countries not members of the European Union (1) (‘the basic Regulation’), and in particular Article 11(3) thereof,

Whereas:

(1) Following an investigation (‘the original investigation’), the Council imposed, by Council Implementing Regulation (EU) No 457/2011 (2) (‘the original Regulation’), definitive anti-dumping measures on imports of melamine originating in the People’s Republic of China (‘the PRC’ or ‘China’). The measures were imposed in the form of a fixed duty of 415 EUR/tonne on all imports from the PRC with the exception of the three cooperating Chinese exporting producers, Sichuan Golden-Elephant Sincerity Chemical Co. Ltd (‘Sichuan’), Shandong Holitech Chemical Industry Co. Ltd (‘Shandong’) and Henan Junhua Development Company Ltd (‘Henan’) whose exports were made subject to a minimum import price (‘MIP’) of 1 153 EUR/tonne.

(2) By Commission Implementing Regulation (EU) 2017/1171 (3), the Commission re-imposed these measures following an expiry review (‘the first expiry review’). Following a second expiry review (‘the second expiry review’), the Commission again re-imposed these measures by Commission Implementing Regulation (EU) 2023/1776 (4).

(3) By Commission Implementing Regulation (EU) 2023/2653 (5) and following a ‘new exporter’ review pursuant to Article 11(4) of the basic Regulation, the Commission amended the measures referred to in recital (2) above by imposing a minimum import price of 1 346 EUR/tonne on imports of melamine manufactured by Xinjiang Xinlianxin Energy Chemical Co. Ltd. (‘Xinjiang’) and originating in the People’s Republic of China.

(4) On 13 November 2023, LAT Nitrogen Linz GmbH and LAT Nitrogen Piesteritz GmbH (together, LAT Nitrogen (6)), OCI Nitrogen BV and Grupa Azoty Zaklady Azotowe Pulawy SA (‘the applicants’), acting on behalf of the Union industry of melamine, within the meaning of Article 5(4) of the basic Regulation, lodged a request for initiating a partial interim review of the anti-dumping measures on imports of melamine originating in the PRC, limited to the form of the measures.

(5) In particular, the applicants requested that the form of the current measures be changed from a fixed duty and MIP to ad valorem duties on the grounds that the circumstances justifying the form of the original duties have changed in a significant and lasting manner; that other lasting changes in circumstances mean that the fixed duty and MIP are no longer fit for purpose; and finally, that the application of a fixed duty and MIP is causing the applicants serious injury.

(6) On 20 December 2023, the Commission announced, by a notice in the Official Journal of the European Union (‘Notice of initiation’) (7), the initiation of a partial interim review of the anti-dumping measures applicable to imports of melamine originating in the People’s Republic of China, pursuant to Article 11(3) of the basic Regulation.

(7) The partial interim review was limited to the form of the measures, in particular whether or not it is in the Union interest to maintain measures currently in force in the form of MIP and fixed duties.

(8) The review investigation covered the period from 1 October 2022 until 30 September 2023 (‘the review investigation period’ or ‘RIP’). The period considered lasted from 1 January 2020 until the end of the review investigation period.

(9) In the Notice of Initiation, interested parties were invited to contact the Commission in order to participate in the investigation. In addition, the Commission specifically informed the applicants, other known Union producers, the known exporting producers in the PRC, the PRC authorities, known importers, users, traders, as well as associations known to be concerned about the initiation and invited them to participate.

(10) Interested parties had an opportunity to comment on the initiation of the partial interim review and to request a hearing with the Commission and/or the Hearing Officer in trade proceedings.

(11) Several parties requested hearings and provided comments upon initiation. The Commission held hearings with the European Panel Federation (‘EPF’), the European Producers of Laminate Flooring (‘EPLF’) and the China Chamber of Commerce for Metals, Minerals and Chemicals Importers & Exporters (‘CCCMC’). The hearing submissions mirrored the written submissions by these parties further to initiation and are dealt with in Section 3 of this Regulation.

(12) In the Notice of Initiation, the Commission stated that it might sample Union producers and unrelated importers in accordance with Article 17 of the basic Regulation.

(13) In the Notice of Initiation, the Commission stated that it had provisionally selected a sample of three Union producers, located in three different Member States. The Commission selected the sample based on the largest volume of production in the Union during the period from 1 October 2022 to 30 September 2023 reported by the Union producers in the context of the pre-initiation standing assessment analysis. The sample accounted for 83 % of the estimated production in the Union of the like product. The Commission invited interested parties to comment on its provisional sample. No comments were received, and the sample was considered representative of the Union industry.

(14) To decide whether sampling was necessary and, if so, to select a sample, the Commission asked unrelated importers to provide the information specified in the Notice of Initiation. Only one unrelated importer, namely Borghi SpA, Grandate/Italy, came forward. Consequently, the Commission decided that sampling was not necessary and requested Borghi SpA to complete the questionnaire for unrelated importers.

(15) The Commission sent questionnaires to the sampled Union producers, to one unrelated importer that came forward during the sampling procedure, and to all known users of melamine. In addition, all applicable questionnaires were also made available on DG Trade’s website (8) on the day of initiation. During the investigation, the Commission sent a questionnaire to the applicants requesting macroeconomic data of the Union industry.

(16) Questionnaire replies were received from the three sampled Union producers, one unrelated importer and five users, two of which are related to each other.

(17) The Commission sought and verified all the information deemed necessary for the determination of whether or not it was in the Union interest to change the form of the existing anti-dumping measures.

(19) On 19 December 2024, the Commission disclosed the essential facts and considerations based on which it intended to change the form of the anti-dumping duties in force. All parties were set a deadline within which they could make comments on the disclosure and request a hearing.

(20) Comments were received from the applicants, Sichuan Golden-Elephant Sincerity Chemical Co., Ltd. (‘SGE’), Kronospan Polska Sp.z.o.o. (‘KRP’), the Unilin Group, CCCMC and EPF. SGE, the Unilin Group and EPF requested a hearing.

(21) The product subject to this review is melamine (‘the product under review’), currently falling under CN code 2933 61 00 .

(22) Melamine is a white crystalline powder produced predominantly from urea and is used mainly for producing laminates, resins, wood adhesives, moulding compounds and paper/textile treatments.

(23) The product concerned by this investigation is the product under review originating in China.

(25) These products are therefore considered to be like products within the meaning of Article 1(4) of the basic Regulation.

(26) In accordance with Article 21 of the basic Regulation, the Commission examined whether changing the form of the measures would be against the Union interest as a whole. The determination of the Union interest was based on an appreciation of the various interests involved, namely those of the Union industry, of unrelated importers and users.

(27) In particular, the Commission examined whether the circumstances underlying the application of a fixed duty and MIP have changed in a significant lasting manner, and whether the fixed duty and MIP are causing the Union industry serious and sustained injury.

(28) All interested parties were given the opportunity to make their views known pursuant to Article 21(2) of the basic Regulation.

(29) As mentioned in recitals (1) and (3) above, the form of the anti-dumping measures subject to this review is a minimum import price of EUR 1 153 per tonne for three Chinese exporting producers, a minimum import price of EUR 1 346 per tonne for a fourth Chinese exporting producer and a fixed duty of EUR 415 per tonne for all other Chinese exporting producers. These duties were based on normal value data assessed for the then applicable investigation period (1 January 2009 to 31 December 2009) in the then used analogue country, i.e. Indonesia (see recitals (78) and (79) of the original Regulation).

(30) The reasons underlying this form of the measures were explained in Section 3.3 of the original Regulation. In particular, it was found that sales prices of melamine after the investigation period were varying between EUR 1 200 and EUR 1 500 per tonne, which was between EUR 300 and EUR 600 above the average sales price in the investigation period of that investigation. A specific duty based on prices prevailing in that investigation period would ‘limit any further price increase of melamine which would seriously affect the overall users’ business’ (10).

(31) In line with the grounds for the review as mentioned under point 4 of the Notice of initiation, the Commission thus investigated whether the circumstances justifying the imposition of the anti-dumping measure in its current form (MIP and specific duty) are still present. The Commission also investigated whether that form of the anti-dumping measure continues to offset the effects of the dumping found in in previous investigations thereby preventing injury to the Union industry.

(32) The cost of melamine is to a large extent set by the price of gas. Melamine can be produced either from urea or ammonia. In the original investigation, from which the current measures are a result, gas was reported to represent close to 50 % of melamine production cost (11).

(33) In the current investigation, the Commission found that, since the imposition of the original Regulation, structural changes in the European gas markets have occurred. In view of the share of gas in the cost of melamine, these changes had a severe impact on the cost of production of melamine.

(34) Up to 2021, Russia accounted for a significant part of the gas supplies to the Union. Indeed, the share of Russia’s pipeline gas in EU imports dropped from over 40 % in 2021 to about 8 % in 2023 (12). In the long preceding period between 2010 and 2021, the share of Russian gas in EU gas imports was in a range of 30 % to 45,5 % (13). As a consequence, EU users of gas were guaranteed relatively stable prices. The Commission found that in the 9-month period lasting from April 2010 to December 2010, prior to the conclusion of the original investigation, gas traded on average at 19,08 EUR/MWh at the Dutch TTF exchange (‘the TTF’) (14). Between 2011 and 2020, gas prices fluctuated between 6 EUR/MWh and 28 EUR/MWh. As from the second half of 2021, EU gas prices started to climb to much higher levels, never seen before. This trend was exacerbated following the unprovoked military aggression by the Russian Federation against Ukraine as from March 2022. Since then, imports of natural gas from Russia, shipped via pipelines, have to a large extent been replaced by imports of gas in the form of LNG from other countries of origin, or by imports of natural gas from Norway in particular (15). This change in the gas supply infrastructure was a further factor contributing to gas prices rapidly increasing. On 22 August 2022, gas prices skyrocketed to a high of 339,20 EUR/MWh for gas traded at the TTF (16). Moreover, the investments made in LNG infrastructure are, in view of their size, deemed to be irreversible. Therefore, it is reasonable to assume that, even when the said military aggression ends, most Member States are unlikely to resume buying gas at prices as low as they were when the original investigation was conducted, and the MIP was set up to and including in 2020.

(35) Moreover, even after the gas prices started stabilising as of early 2023, the average gas price remained higher than it had consistently been before 2021. During the review investigation period, gas traded on average at [50-60] EUR/MWh (17) which is about three times higher than the average price of the period April to December 2010. On 29 September 2023, the last trading day of the review investigation period, natural gas was traded at EUR 41,86/MWh at the TTF (18). This is significantly less than the high observed in August 2022 but still considerably above the levels seen up to (and including) the first half of 2021.

(36) In the period considered used in the original investigation, i.e. from 1 January 2006 to 31 December 2009, cost of production incurred by the Union industry ranged from EUR 1 054 to EUR 1 229 per tonne (19). From 1 January 2012 to 31 March 2016, the period considered used in the first expiry review, it ranged between EUR 1 036 and EUR 1 144 per tonne (20). In 2019, the Union industry’s cost of production stood at EUR 980 per tonne (21). Therefore, in all periods investigated by the Commission between 2006 and 2019, the Union industry’s cost of production per tonne of melamine remained remarkably stable, the difference between the lowest (EUR 980) and the highest (EUR 1 229), being a mere 25,4 %.

(37) By contrast, during the largest part of the period considered, from 1 January 2021 until 30 September 2023, the cost of production incurred by the Union industry ranged between EUR 1 611 and EUR 3 132 per tonne. This perspective omits the year 2020, the first year of the period considered because the rather low cost in that year was realised under the influence of the COVID pandemic related economic downturn. This illustrates to what significant extent the rapidly increasing gas costs (see recital (34)) affected the total cost of production of the Union industry.

(38) The applicants submitted that natural gas, natural gas-based key input materials and steam together, taking account of the currently prevailing gas prices, amounted to 80 % – 90 % of the Union producers’ total estimated production costs. CCCMC did not dispute that (22).

(39) Based on the above, the Commission concluded that since the original investigation gas costs have increased significantly, in absolute and consequently in relative terms, which is considered a relevant change in circumstances within the meaning of Article 11(3) of the basic Regulation.

(40) The applicants claimed that since the original investigation, costs of compliance with the European environmental framework have increased. The single most important environmental scheme the Union industry is subject to is the EU Emissions Trading System (ETS). The ETS was initially established in 2005. This means that the ETS already existed at the time of the original investigation. Yet, significant changes to the ETS have occurred since then, which directly translated into significantly higher production costs to be borne by the Union producers.

(41) CCCMC noted that the share of any such environmental compliance costs in the total cost of production was not evident from the request and generally questioned the significance of such costs. In this context, CCCMC hinted at the availability of free allowances under the ETS scheme. CCCMC also claimed that any costs emerging from complying with the ETS should be offset by the newly introduced Carbon Border Adjustment Mechanism (CBAM) (23).

(42) According to the evidence and projections filed by the applicants, the costs incurred for the rights to emitting CO2 will until 2026 exceed the benefit from available free allowances on the emissions caused by producing the inputs needed to produce melamine. Data reported in the Request showed that the price projections on total company pollutant emission will increase between [55 % and 135 %] (24) between 2021 and 2026.

(43) Related to environmental costs, CCCMC claimed that the Commission’s disclosure solely of a percentage change without providing a relevant baseline value or cost context was meaningless.

(44) The Commission reiterated that the provided range included the lowest and the highest estimated increase of environmental costs among the sampled Union producers. It is not unusual that the increase rates vary significantly between companies with different emission purchasing policies. Moreover, the precise figures per company were considered business confidential information.

(45) As to any offsetting of costs borne by the Union industry under the CBAM, the Commission agreed with the applicants and confirmed that indeed melamine is not eligible for protection under the CBAM.

(46) The applicants also pointed out that since the original investigation, overall price inflation has been noticed. Factors leading to inflation included foremost the structural changes in gas markets explained under recital (34) but also bottlenecks in supply chains and surging demand. Had the minimum import price of EUR 1 153 per tonne imposed in the original investigation been adjusted by the yearly inflation rates published by Eurostat, a minimum import price of at least EUR 1 474 would be the result for the year 2022. The Commission noted that melamine sales prices of the Union industry went as high as EUR 3 196 per tonne (average of 2022, see Table 7) and Chinese import prices as high as EUR 1 990 per tonne (average of 2022, see Table 3). Even though prices subsequently fell in the review investigation period, it is noted that cost of production incurred by the Union industry still stood at EUR 3 069 in the review investigation period (see Table 7).

(47) CCCMC considered that the Union inflation rate peaked in 2022 but subsequently declined because the underlying inflation causes, such as the surge in gas prices and the melamine demand following the COVID pandemic, had disappeared. The Commission agreed on the fact that overall price inflation peaked in 2022 and that since then inflation rates have lowered. However, prices and, thus, costs are still at a level that is significantly above the level of 2009, the investigation period of the original investigation. There are no indications that that the overall impact of inflation on prices since 2009 is likely to reverse.

(48) In the original investigation, concerns were raised by users with regard to the security of sufficient melamine supply at affordable prices (25).