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Growing demand and tight supplies of melamine may have a downstream impact on processors using melamine-based compounds.

Melamine Chemicals Inc. of Donaldsonville, La., announced a 2 cent-per-pound price increase for melamine crystal, its principal product. The price hike is set to take effect for orders after June 1, according to a news release.

Demand for the product, which is used primarily in wood laminates, paints and thermoset plastics, is driving the price increase, Wayne D. DeLeo, chief financial officer for Melamine Chemicals, said by telephone from Donaldsonville.

``It's all driven by demand,'' DeLeo said. ``There's definitely a shortage of melamine currently. Our major problem is trying to build inventory.''

Building inventory may be tough for Melamine Chemicals. Its sole supplier of urea, a prime raw material for melamine, is shutting down for two weeks in October. Without urea, melamine production at the firm's only plant will have to shut down, too, he said.

Melamine Chemical is the second largest producer of melamine in North America, and the third largest globally.

The largest North American producer of melamine is AMEL in Fortier, La. AMEL is a joint venture between DSM Melamine Americas Inc. of Addis, La., and Cytec Industries of West Paterson, N.J. DSM Melamine, a unit of DSM NV of Heerlen, Netherlands, distributes melamine made at AMEL's plant and earlier announced its own 2 cent-per-pound hike effective May 1.

Plastics News, which has tracked melamine/phenolic resin pricing, is changing its thermoset pricing chart to better reflect market conditions.

Melamine/phenolic will be dropped from the chart because of the small number of users and single domestic producer. The chart now will track melamine molding compound, used for institutional dinnerware, buttons, knobs, handles ashtrays and other applications.

Pricing data on melamine molding compound was incomplete at press time, so no price is listed this week.