Drivers of diesel vehicles, including freight trucks, are feeling very anxious because the supply of urea water was disrupted two years ago. While the South Korean government inspects the site and holds meetings, it also communicates with China through a “hotline.”
They are busy responding to the situation by requesting the government to resolve the issue. The government has already stockpiled three months' worth of urea water and has secured alternative import sources such as Southeast Asia and the Middle East.
The government believes that no riot will occur. However, there is a possibility that stockpiling for resale may occur, so we are monitoring the situation closely.
According to the South Korean government and the chemical industry, Chinese companies are planning to export to South Korea at the end of November.
The shipping of urea water has been suspended by China Customs, causing problems in the import of urea water. Although the Chinese authorities have not officially restricted the export of urea water,
It appears that China has informed its domestic companies of its policy to refrain from exporting due to concerns that it may disrupt the supply of products. Urea is key to making urea water to reduce greenhouse gas emissions in diesel cars
Although it is a material, it is also used as an agricultural fertilizer. For this reason, demand for agricultural urea in China increases rapidly from October to March every year. Chinese authorities believe that the supply and demand balance of urea within the country will collapse.
We are in a situation where we have to control the price rise caused by A source in the industry said, ``I have heard that the Chinese government is preventing (urea exports) from rising in the price of urea fertilizer during the agricultural preparation period.''
Told. However, there is still no problem with the production of urea water in South Korea. However, at sites that experienced major disruption due to a shortage of urea water two years ago, the sales price of urea water has been increased and diesel
There are also signs that car drivers are stocking up. Im, who runs a gas station in Michuhol-gu, Incheon City, said, ``Normally, the gas station is 10 liters.
We have 300 to 400 cans of this product in stock, but we have not been able to secure urea water for the past six months, so we only have 100 cans in stock.''Due to the lack of inventory, we have lowered the price to 10,000 won (approx. 1120 yen)
"We raised the price from 15,000 won (approximately 1,680 yen)." Mr. Choi, who runs a gas station in Gyeyang District, said, ``We have some in stock for the time being, but we are trying to buy a lot at once.''
We have a number of drivers who are very busy, and we are limiting purchases to three cans per person." These are by no means groundless concerns. China depends on 90% of the supply of urea needed to produce urea water
If the import of produced urea continues for a long time, there is a possibility that the situation that occurred two years ago, when diesel cars could not be operated due to the inability to obtain urea water, could recur. Amid such concerns, South Korea
The stock prices of KG Chemical and Lotte Fine Chemical, domestic urea water producers, rose 8.67% and 3.33%, respectively, on the 4th.
According to the Customs Service, South Korea produced 91% of urea for urea water production from January to October this year.
% is imported from China. Due to the urea water shortage in 2021, the ratio of Chinese products decreased to 71% and 67% in 2022, but this year the ratio decreased due to the price competitiveness of Chinese products.
Imports increased significantly again. The proportion of urea for fertilizer produced in China is low at 22%, so there is no major impact. On this day, related ministries such as the Ministry of Trade, Industry and Energy, the Office of State Coordination, the Ministry of Strategy and Finance, and the Ministry of Foreign Affairs,
Officials from seven companies that import dual-use urea held a response meeting and began formulating countermeasures. The South Korean government is focusing on dispelling concerns on the ground. In particular, China's export restrictions on urea are official measures.
The company emphasizes that the company is not completely stockpiled, has sufficient domestic inventory, and has secured alternative import sources in the event of an emergency. Compared to two years ago, when dependence on Chinese products reached 97% and there was no domestic inventory or alternative import source.
explains that the situation is completely different. Lee Seung-ryul, director of the Industrial Policy Office at the Ministry of Industry, said, ``Currently, we have enough domestic inventory and three months' worth of planned imports from countries other than China, and we have secured a three-month supply of goods from countries such as Southeast Asia and the Middle East.
We also have alternative import sources," and added, "We have built a system to respond to crises together with the industry, so we will take thorough measures to ensure that there is no disruption to the supply and demand of urea."
It also requested smooth local customs clearance for urea exports through a hotline with Chinese authorities. On the 1st, the ambassador to China confirmed that there was a problem with customs clearance of urea.
We sent a letter to the National Development and Reform Commission and received a response from the authorities stating that we would ``understand the relevant details and take subsequent measures.'' Discussion on development plans for China-Korea Free Trade Agreement (FTA)
On the 4th, Ahn Deok-geun, head of the Negotiations Headquarters at the Ministry of Industry and Trade, who is visiting China to discuss the issue, also met with Wang Shuwen, representative for international trade talks at the Chinese Ministry of Commerce, and called for immediate measures.
At a regular press conference on the 4th, Chinese Ministry of Foreign Affairs Spokesperson Wang Wenbin responded to a related question from a South Korean reporter by saying, ``The relevant departments of China and South Korea
The police department has contacted us regarding this." However, experts say that such a situation could be repeated at any time amid the US-China trade dispute, and that the government should rush to build a supply chain.
It is recommended that there should be. Professor Seok Byung-hoon of the Department of Economics at Ewha Women's University said, ``Considering price competitiveness, it is unavoidable to rely on Chinese urea.''
"We must increase our stockpiles from Japan and create a system to immediately secure the necessary quantities from neighboring countries such as Japan and Vietnam, and eliminate concerns about a shortage of urea water."
Kim Hyeon Soo, head of the economic policy team at the Korean Chamber of Commerce and Industry, said, ``We're in a situation where we don't know when a risk will occur in any supply chain.''
We need comprehensive policy support for diversification and independence."
2023/12/05 07:05 KST
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