China said Thursday it would slap anti-dumping penalties on a chemical imported from Saudi Arabia and Taiwan after an investigation found the product had been priced too low.

The commerce ministry said it will impose tariffs of up to 13.6 percent on imports of 1,4-Butanediol, a chemical used to make some plastics, elastic fibre and polyurethanes, from Friday.

"The imported products were dumped (in China) and caused material damage to the 1,4-Butanediol industry in mainland China," the ministry said in a statement posted on its website.

Dumping occurs when a foreign company sells a product in another market at less than cost price.