Home Business Concerns about logistics disruption due to shortage of ‘urea water’ from China… 2 million trucks affected

Concerns about logistics disruption due to shortage of ‘urea water’ from China… 2 million trucks affected

by news dir

Urea water is an essential product for nitrogen oxide reduction equipment such as trucks.

‘Coal dispute’ China’s urea export restrictions cause domestic prices to jump and volume to drop

After the government prepares countermeasures for all ministries… Industry “Considering imports from Russia”

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(Seoul = Yonhap News) Reporter Jin Yeon-soo = Ahead of next month’s fuel tax cut, domestic gasoline prices have risen by more than 30 won per liter just this week. According to the Korea National Oil Corporation’s oil price information service Opinet, the average price of gasoline sold at gas stations nationwide in the fourth week of October (October 25-29) was 1,762.8 won per liter, up 30.3 won from the previous week. It is the highest in seven years since the fourth week of October 2014 (1,776.4 won). The photo is information on gas prices at a gas station in downtown Seoul on the 31st. 2021.10.31 [email protected]

(Seoul = Yonhap News) Reporter Jae-young Cho, Bo-ram Yoon and Young-shin Kim = Concerns about a logistics disruption are growing as the shortage of ‘urea water’, which is essential for diesel engine vehicles such as cargo trucks, has occurred.

Urea water is a component that converts nitrogen oxides (NOx), a carcinogen generated by diesel vehicles, into water and nitrogen, and is an essential item for nitrogen oxide reduction devices (SCRs) that are mandatory for trucks.

Of the 3.3 million diesel trucks currently in operation, about 2 million, or 60%, are equipped with SCR and require urea water.

According to the government and the oil refining industry on the 31st, China, which accounts for about two-thirds of domestic urea imports, recently made it mandatory for pre-export inspection of urea, a raw material for urea water.

In the meantime, China has produced urea by extracting ammonia from coal, but it is interpreted that this measure was taken when coal supply became scarce due to the conflict with Australia and the price of coal soared.

An industry official said, “Although the Chinese government has mandated pre-export inspection, exporters are experiencing confusion as there are no specific inspection methods and inspection cycles.”

Another official said, “The Chinese government did not officially disclose it, but it seems that it has actually imposed export restrictions.”

Because of this, the price of urea water has more than doubled in the domestic market, and even stockpiling has occurred, resulting in a shortage at gas stations and agencies.

More than 80% of the domestic urea water market is LOTTE Fine Chemical[004000]and KG Chemical[001390]Currently, domestic companies are said to have stocks of 1 to 2 months’ worth of urea water.

If urea water is not added in time, pollutants may not be reduced, and there may be problems with driving, such as not starting the engine. This is why there are concerns that a logistics crisis will occur if the shortage of urea water is prolonged.

An official from a urea water manufacturer said, “If this condition continues, there will be no urea water circulating on the market from December.” It will not be possible,” he feared.

In response, the government has taken emergency measures.

The Ministry of Trade, Industry and Energy, the Ministry of Environment, and the Ministry of Land, Infrastructure and Transport held a working-level meeting at the ministries level to accurately identify the supply and demand status of elements and prepare countermeasures.

The Ministry of Industry, in consultation with the Chinese customs authorities, is requesting cooperation for the smooth supply and demand of elements while understanding specific export restrictions.

The Ministry of Land, Infrastructure and Transport is reviewing measures such as expanding rail transportation and operating more than 100 military consignment vehicles as alternative means to prepare for the possibility of logistical difficulties due to restrictions on freight vehicles.

The industry is also considering import alternatives other than China.

An industry official said, “We are considering importing from Russia instead of China, but in this case it will take a long time.”

Kim Pil-su, a professor of future automobiles at Daelim University, said, “There seems to be no way to solve this situation right away because the coal itself, which extracts urea from China, is the cause.” “He said.

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