South Korea relies heavily on China for importing automotive urea, a coal-derived product. In mid-October, China reduced urea exports due to a shortage of coal. South Korea is currently in serious danger as nearly 4 million diesel vehicles cannot be driven without urea.
Urea is the main component of diesel exhaust (DEF), an additive used in diesel vehicles to reduce emissions. In South Korea, DEF is essential not only for the purpose of air quality control, but also for the proper operation of diesel vehicles sold after January 2015. Diesel vehicle owners need to fill the DEF reservoir on a regular basis. Otherwise, the vehicle may encounter equipment failure or engine fuel system failure.
In South Korea, about 4 million diesel vehicles need urea to operate, of which 2 million are trucks. In short, the shortage of automotive urea is disrupting the country’s logistics industry.
According to data from the Korea Trade and Investment Promotion Agency (KOTRA), China is the world’s largest producer and exporter of urea, supplying about 5 million tons of urea each year. In the first nine months of this year, South Korea imported 564,000 tonnes of urea from China. It accounts for 14% of China’s total urea exports, second only to India.
According to the Korean Ministry of Industry, in the same nine months, 97.6% of South Korea’s industrial urea, which is the main raw material for automotive urea, was supplied by China.
In the past, Korean companies also produced urea, but competing with Chinese and Russian products was a price disadvantage. Almost all urea manufacturers withdrew from the market around 2013. For example, Korea Fertilizer Co., Ltd. Couldn’t bear the loss and stopped producing urea in 2011.
According to South Korean media, Lotte Fine Chemicals, South Korea’s largest manufacturer of urea for automobiles, has announced that its current inventory will be sold out by the end of this month.
Automotive urea is now on the market at 10 times the price it used to be. At the same time, the supply of urea at gas stations was often interrupted. Some people hoard their products in the hope of making huge profits in the future.
Incheon Port Authority said that many of the trucks used for loading and unloading goods are diesel vehicles, so if the shortage continues until the end of this month, cargo handling at Incheon Port will be affected.
In addition, 80.5% of fire trucks and 90% of ambulances nationwide need urea to operate.
A man from the South Korean National Construction Union held a demonstration in front of the government building in Seoul on November 4, complaining that dump trucks and concrete trucks were shut down due to lack of urea. The demonstrator demanded that the government take responsibility for the soaring urea for automobiles and provide relief plans to workers operating heavy machinery.
The government has not yet made an effective plan to resolve the crisis, other than limiting hoarding.
“Excessive reliance on China is a big problem.”
The South Korean government’s policy towards the Chinese Communist Party (CCP) has been criticized because of the unexpected urea deficiency and its serious consequences.
In an editorial, Seoul Daily pointed out that the turmoil of urea deficiency was a man-made disaster caused by excessive dependence on China.
“It’s sad that only South Korea was hit hard by the turmoil in automotive urea,” the article said. “Excessive reliance on China turns out to be a big problem … South Korea has received economic retaliation. [from China] After the THAAD incident, however, the dependence on China could not be reduced. It continues its tightrope walking policy of relying on the United States for national security and China for its economy. “
The author also criticized the government’s slow response when the CCP banned coal imports from Australia a year ago and restricted urea exports 20 days ago.
“The most important thing is to reduce our dependence on China. If we continue to have a” unrequited love “with China after each hit, we will not be able to avoid the economic and security crises.” Stated.
Yun Suk-yul, a presidential candidate for the People Power Party and former prosecutor’s president, wrote on Facebook: What was the government doing during this time? “
He emphasized managing scarce resources and raw materials that, when elected, are heavily dependent on a particular country, and developing long-term and short-term supply and demand measures.