The element count debacle that caused us to stomp our feet is poised to return. This is because China has been found to have substantially restricted the clearance of yew water. The South Korean government recently held a joint meeting to develop an emergency response in the face of China’s suspension of urea clearance. A solution to the problem of elements that local companies were trying to import from China in November were halted at the behest of local customs was high on the agenda. The meeting is being attended by relevant ministries, including the Ministry of Trade, Industry and Energy, the Ministry of Planning and Finance, the Ministry of the Environment, and the Ministry of Foreign Affairs, to discuss various countermeasures, and we have strongly requested the Chinese government to resolve the issue.
The importance of elements and element count
Urea is the main component of urea water needed to treat nitrogen oxides (NOx) from diesel vehicles. Urea water is also used in large factories and power plants to reduce emissions, playing an important role in many industries including power generation and transportation. The disruption of these elements could directly impact industries in South Korea, and we need to be properly prepared.
Under these circumstances, China’s suspension of urea customs clearance had a major impact on South Korea’s industrial sector. The lack of urea water makes it harder for diesel vehicles to meet emissions standards, which can further exacerbate air pollution problems. In addition, shortages of urea water can make it difficult for power plants and factories to comply with environmental regulations, which can also have a negative impact on environmental protection. Therefore, the South Korean government needs to strengthen cooperation with the Chinese government and quickly find a solution to the issue of suspended urea clearance. This will benefit the stability of the industrial sector and environmental protection through cooperation and communication between the two countries.
Manage urea supply chain measures and stockpiles
The South Korean government expects its current stockpile of urea to run out by February of next year. In this regard, the Ministry of Economy, Trade and Finance has announced that it has about three months’ worth of inventory of urea and urea water for vehicles, including domestic stocks and planned imports from countries outside China such as Vietnam and Japan. The government also said it is in close consultation with China to ensure that contracted volumes are introduced as scheduled, and is pursuing measures such as helping the industry diversify its import fleet and increasing government stockpiles of elements for vehicles.
Past factorization disasters and current responses
The South Korean government, which experienced a urea crisis in 2021, has been criticized for not doing enough to prepare for this event. The fact that we are more dependent on China than we were two years ago adds to the severity of the problem. Despite rising urea prices in China and rumors of export disruptions, the government has not been proactive in its response. This is raising the possibility of a crisis situation across domestic industries.
The shortage of urea water and the disruption of urea clearance could make it difficult to meet South Korea’s diesel vehicle emission standards and exacerbate air pollution. This makes it difficult for power plants and factories to comply with environmental regulations and can have a negative impact on environmental protection. Therefore, the South Korean government needs to strengthen cooperation with the Chinese government and quickly find a solution to the urea clearance disruption. This will benefit the stability of the industrial sector and environmental protection through cooperation and communication between the two countries.
The South Korean government expects its current urea stockpile to run out in February of next year. Therefore, the Ministry of Planning and Finance has about three months’ worth of inventory, including elements for vehicles, plus domestic stocks and planned imports from countries outside China. The government is also in talks to ensure that contracted volumes from China are introduced as scheduled, and is pursuing measures such as helping the industry diversify its import fleet and increasing government stockpiles of elements for vehicles.
The South Korean government, which experienced a urea crisis in 2021, has been criticized for not doing enough to prepare for this event. The fact that we’re more dependent on China than we were two years ago underscores the severity of the problem.
Urea scarcity and market reaction
There is a growing concern in the market that the shortage of urea could return. This is also reflected in the surge in urea sales online, with prices for urea spiking more than 10-fold in 2021. If the government doesn’t come up with an effective alternative by February, we can’t rule out the possibility of another urea shortage. Currently, some of the nation’s urea gas stations are already known to be out of stock.
