The European Commission has announced it is terminating the anti-dumping duties on imports of the chemical dicyandiamide from China, introduced in 2007.

The European Union imposed a 49.1 percent tariff on the chemical coming from the Asian country because it was concerned that it could cause price dumping in Europe. However, authorities found that imports of the chemical from China were no longer a threat to domestic production and decided to lift the duty.

Within the EU, dicyandiamide is entirely produced and supplied by German company AlzChem AG. The chemical is used widely in the pharmaceutical sector, as well as in other industries like water treatment, pulp and paper, textile and leather.

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Although China is likely to continue importing the chemical at unfairly low prices after the removal of the tariff, it is worth noting that the restrictions have had a positive effect to reduce the level of dumping, the European Commission stated in the EU's official journal last week.

The Commission pointed out that introducing the tariff has allowed the EU industry to recover from the harmful effect of the dumping and to explore other markets as well. Over the past seven years Chinese imports have dropped significantly and currently hold a very small share of the market, so it is unlikely that lifting the duties will result in a noticeable drop in prices.