Melamine Used As Cake Additive: Chinese Chem. Plant Manager
"Our chemical products are mostly used for additives, not for animal feed," said Li Xiuping, a manager at Henan Xinxiang Huaxing Chemical in Henan Province. "Melamine is mainly used in the chemical industry, but it can also be used in making cakes."
There you have it folks - from the International Herald Tribune. It's at the very bottom of the article. And the Washington Post has the revelation that before melamine there was urea being added, for the same reason - inflated and bogus protein content.
Melamine scrap is used in North America as an abrasive blast medium. Sonapa sells recycled plastics, including melamine scrap with formaldehyde. Here is there ad for "Type III – Thermoset Melamine Formaldehyde: Melamine is engineered for stripping the most difficult surfaces while providing an effective stripping rate. Melamine is the most aggressive plastic abrasive, offering an excellent range of stripping capabilities. Melamine can be used as a replacement for glass beads and other harsh abrasives."
In China, melamine scrap is mixed into soymeal, and sold to feedlots and farmers. A manager with Tai'an Yongfeng Feedmill Co. Ltd in the coastal province of Shandong says that "The chemical plant next to us used the melamine scrap as waste for landfill and built houses on it. Then they tore down the buildings to get the scrap once the price rose. It is a very popular business here. I know people have been mixing this since 1991."
One article I read spoke of an online market, Alibaba.com, where companies sell and buy chemicals and which is very big in China.