Imports of urea from China (PG)The government is also examining the possibility of domestic production of urea to prepare mid- to long-term countermeasures against the shortage of urea water caused by China’s export restrictions.
In addition, the management of items that are too dependent on foreign imports such as China, which could become a second urea water crisis, will be strengthened.
It was confirmed on the 21st that the Ministry of Trade, Industry and Energy is currently reviewing fundamental measures for such content.
In a call with Yonhap News Agency, multiple officials from the Ministry of Industry and Commerce said in a call with Yonhap News, “If we take the expansion of imports from third countries on one axis, domestic (urea) production as in the past is on the other hand. We need to consider whether this is impossible,” he said.
Although urea, the raw material for urea water, is currently entirely dependent on foreign imports, there were several urea production plants in Korea until the 2000s.
According to the industry, in the 1970s, the domestic urea plant was in its heyday, with a production capacity of 1.6 million tons at the time, but after the first and second oil shocks, Namhae Chemical[025860]and Samsung Fine Chemicals.
Afterwards, Namhae Chemical stopped producing urea in the early 2000s amid the low-price offensive of Chinese urea, and Samsung Fine Chemicals, which remained until the end, eventually closed its business in 2011 for the same reason.
As a result, there is currently not a single company that produces urea in Korea.
The key to domestic production of urea is business feasibility. As production has been halted due to being pushed back by China’s price competitiveness, some government support is inevitable to resume production.
The question is whether companies are willing to participate.
Currently, Namhae Chemical imports urea and produces fertilizer based on it. Lotte Fine Chemical, the successor of Samsung Fine Chemicals[004000]is producing urea water as an import factor.
An official from the Ministry of Trade, Industry and Energy said, “Nothing has been decided on companies that can produce urea in Korea.
The official added, “If there is a willingness to (produce urea), we should seek support measures together.”
Urea water production plantHowever, without a reasonable level of support, it is difficult to expect companies to start production immediately.
A Lotte Group official said, “Ureas account for less than 10% of Lotte Fine Chemical’s total sales. Wouldn’t it? If any company does it, there must be support based on political judgment.”
The Ministry of Trade, Industry and Energy is persuading importers about the need to diversify importing countries.
Another official from the Ministry of Trade, Industry and Energy said, “We are talking about diversifying into a third country even if it costs money, because we do not know what will happen if we trust only China.”
Meanwhile, the Ministry of Trade, Industry and Energy is in a situation where the urgent fire of the shortage of urea water has been put out as urea is secured one after another, but the position is that it can only take a breather when all the large-scale quantities that are expected to be imported within this month come in.
Accordingly, related procedures such as expedited customs clearance and prior quality inspection are shortened as much as possible, and the ‘fast track’ is in operation so that the quantity can be released to the market at the same time as import.
The Ministry of Trade, Industry and Energy said, “We are taking care to ensure that quantities from China can enter the production line as quickly as possible.”
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