Dependence on Chinese Imports Led to 'Yosusu Shock'...Urgent Need for Domestic Production Measures of Essential Items

China-Australia 'Coal' Conflict Leads to 'Yososu' Shortage in Korea
31.3% of Raw Material Essential Imports, Over 80% Dependence on Specific Countries Revealed
Construction and Freight Workers Say "Yososu Price Surge Hits Livelihoods Hard"
Calls for Supply Chain Diversification and Localization of Essential Items
President Moon: "Need Various Measures Like Diversifying Import Sources, Technological Independence, and Domestic Production for Daily Necessities"

On the 8th, a notice informing the shortage of urea solution is posted at a gas station in Yangcheon-gu, Seoul.
[Image source=Yonhap News]

[Asia Economy Reporter Yoon Seul-gi] The industrial sector is in turmoil as the 'AdBlue crisis' continues for several days. Among the 12,586 imported essential items, including urea, the raw material for AdBlue, 31.3% have a dependency rate exceeding 80% on specific countries, raising concerns about a potential 'second AdBlue' crisis. Consequently, there are calls to diversify supply chains or promote domestic production of essential raw materials.

Since early November, a shortage of AdBlue, essential for diesel engine vehicles such as freight trucks that use diesel as fuel, has led to the 'AdBlue crisis.' AdBlue became essential after the European Union (EU) established the 'Euro 6' regulation in 2014 to reduce nitrogen oxides (NOx). Diesel vehicles equipped with the AdBlue system cannot start without AdBlue, and if the AdBlue level is insufficient, related vehicle systems may malfunction.

Urea is produced from ammonia extracted from coal, and AdBlue is a liquid mixture of urea and water. While domestic chemical companies produce AdBlue products themselves, the problem arose due to difficulties in securing the essential raw material, 'urea.' South Korea relies almost entirely (97%) on China for urea imports. However, as China faced conflicts with Australia over coal imports, domestic coal shortages occurred. This led to power shortages and a decrease in urea production.

Chinese authorities effectively banned urea exports to meet domestic demand. As a result, imports of Chinese urea, which account for most of South Korea's urea supply, were cut off, disrupting domestic AdBlue production and ultimately causing the 'AdBlue crisis.'

Construction machinery workers are shouting slogans demanding a resolution to the urea solution shortage crisis that threatens their livelihoods during a press conference hosted by the National Construction Workers' Union in front of the Government Seoul Office Building on the morning of the 9th. [Image source=Yonhap News]

As the shortage of AdBlue needed by industries such as logistics, shipbuilding, construction, and steel caused prices to soar, related industries have voiced complaints about the damage caused. On the 8th, the Cargo Solidarity Headquarters of the Public Transport Union under the Korean Confederation of Trade Unions (KCTU) issued a statement saying, "The surge in AdBlue prices is affecting the income and livelihood of freight workers," urging measures to protect freight workers.

Construction machinery workers also appealed that the AdBlue crisis has dealt a direct blow to their livelihoods. On the 9th, the National Construction Workers' Union held a press conference in front of the Government Seoul Office in Jongno-gu, Seoul, demanding solutions to the AdBlue supply issue, stating, "AdBlue, which used to cost less than 10,000 won, has soared to over 100,000 won."

On the same day, the KCTU commented on the AdBlue crisis, stating, "Given the ongoing US-China conflict, there is a possibility of second and third AdBlue crises occurring at any time. Therefore, it is necessary to increase the self-sufficiency rate of materials, parts, equipment, and raw materials in key industrial sectors and prepare for a fundamental shift from an export- and trade-centered economic structure." The argument is that the higher the overseas dependency, the more vulnerable the supply is to global trade order fluctuations, so increasing self-sufficiency is essential for stable raw material supply.

In light of this situation, there are calls for measures such as diversifying supply chains or domestic production to reduce dependency on specific countries for essential items used by the industrial sector.

According to data received by Rep. Han Mu-kyung of the People Power Party, a member of the National Assembly's Industry, Trade, Energy, Small and Medium Enterprises Committee, from the Korea International Trade Association, as of January to September this year, among 12,586 imported items classified by the 6-digit Harmonized System (HS) code, 3,941 items (31.3%) had a dependency rate exceeding 80% on specific countries. Among these, 1,850 items (about 47%) were from China, followed by the United States (503 items) and Japan (438 items).

Notably, magnesium ingots, an essential raw material, are 100% imported from China. However, supply shortages have occurred as the Chinese government controlled production due to power shortages. Magnesium ingots, used in aluminum alloy production, are essential raw materials for automobile chassis, vehicle seat frames, and lamps, yet reliance solely on imports raises concerns that this could become a second AdBlue crisis.

Rep. Han urged, "As global supply chain instability continues, items with a dependency rate exceeding 80% on specific countries should be addressed through supply chain diversification or domestic production."

President Moon Jae-in is speaking at the Cabinet meeting held on the morning of the 9th in the Blue House video conference room. [Image source=Yonhap News]

Meanwhile, as anxiety over the AdBlue shortage grows, the government has taken action. On the 9th, President Moon Jae-in, during a Cabinet meeting at the Blue House, stated, "The government is mobilizing all diplomatic capabilities to secure overseas supplies with full effort," adding, "We will prioritize using surplus in the public sector where urgent and ensure supply stabilization through emergency supply adjustment measures."

President Moon particularly emphasized, "For items with excessively high import dependency on specific countries, thorough preliminary investigations and the establishment of a meticulous management system are requested," and added, "Until now, attention has been focused on strategic materials in advanced technology sectors, but I hope the management scope will be expanded to items closely related to daily life, and various measures such as diversifying import sources, technological independence, and domestic production will be devised."

This content was produced with the assistance of AI translation services.