Government: "No Worries About Supply of Automotive Urea Solution... 70 Days' Stock Available"

[Image source=Yonhap News]

As some petrochemical companies in China reduce exports of urea for fertilizer, the government has stated that there is no problem with the supply of urea for diesel vehicles in the domestic market.

On the 14th, the Ministry of Trade, Industry and Energy announced that it held a meeting to inspect the supply chain of vehicle urea at the Korea Chamber of Commerce and Industry in Seoul. The meeting was attended by vehicle urea import and distribution companies such as Lotte Fine Chemical, Bluetech, and Seonghong, as well as related organizations including the Korea Chain Store Association and the Korea Trade-Investment Promotion Agency (KOTRA).

Vehicle urea importers explained that since reports of China’s export restrictions on urea began on the 7th, they have been signing new contracts normally with Chinese manufacturers, and there has been no disruption in the supply of urea imported from China.

The Ministry of Trade, Industry and Energy has identified that currently, a total of 70 days’ worth of vehicle urea stock is secured domestically, including 55 days’ worth of private inventory and 15 days’ worth of stockpiled supply from the Public Procurement Service. In addition, companies have signed import contracts for vehicle urea equivalent to 2.5 months’ supply, which will be imported sequentially until November.

From the 8th to the 13th of this month, immediately after reports of China’s export restrictions on urea, there were seven new contracts between Korean companies and Chinese vehicle urea manufacturers, amounting to 8,600 tons.

KOTRA, which operates several trade offices in China, reported, "The price of urea transactions in China remains stable, and production by local urea companies is recovering, so there appears to be no further moves to reduce exports."

However, due to the experience of the 2021 "urea crisis," some consumers have increased their purchases of urea, making it difficult to obtain urea mainly through online distribution channels, and prices have risen significantly compared to usual. The distribution industry stated, "Due to consumer anxiety, some shortages are occurring in online shopping malls," and added, "Large marts and other distribution sectors plan to cooperate with manufacturers to ensure there are no disruptions in distribution."

Regarding this, the Ministry of Economy and Finance said, "As of the 14th, 97% of gas stations nationwide selling urea have stock," and "Truck drivers and the public can normally purchase urea at gas stations."

The urea imported by South Korea is broadly divided into fertilizer urea and industrial urea mainly used for automotive urea. Among these, the largest share of fertilizer urea imports comes from Qatar at 41%, while China accounts for only 17.4%. Unlike fertilizer urea, the import dependency on China for industrial urea mainly used for vehicle urea is relatively high at about 90%.

Yang Gi-wook, Director of Industrial Supply Chain Policy at the Ministry of Trade, Industry and Energy, said, "Through various diplomatic channels, we have confirmed that China’s reduction in urea exports is not an official government measure targeting fertilizer export volumes," and added, "Unlike two years ago, we are maintaining adequate stock and have a response system in place, so the public does not need to be overly concerned."

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