Urea water surge from China, logistics crisis must be stopped somehow

The amount of urea required for the operation of diesel trucks is running out of stock due to China’s urea export restrictions. Urea water is used in catalyst devices attached to diesel engines to reduce nitrogen oxides in automobile exhaust gas to water and nitrogen for the purpose of reducing air pollution. Domestically, most of its demand has been dependent on Chinese imports, but since mid-February, China implemented export control measures to strengthen quarantine of urea, etc., due to unstable coal supply and demand.

The stock of urea water held by domestic companies is only about a month and a half, and the price of urea water has already soared 10 times due to supply and demand instability. Due to rising costs, more and more people are hesitant to give up truck service. According to the related industry, trucks that use urea water account for 30% of medium and large vehicles and 10% of small vehicles. If the operation of trucks, which covers a large part of domestic logistics, is disrupted, the negative impact on the economy is obvious.

The government held a belated countermeasure meeting on the 2nd, but there is no clear solution for now. At the meeting, it was decided to make diplomatic efforts to request the easing of China’s export restrictions as the best policy right away, but it is unclear how effective it will be as the situation in China is also urgent. It is questionable whether the utilization of industrial urea water, discussed together, is possible due to quality problems, and it takes at least two or three months to replace imports from Russia. Right now, there is no other way than to comprehensively seek out various alternatives.

Domestic urea water production has sharply decreased since 2010, when China’s low-priced urea imports became active. Korea is the second most import-dependent country in the world after the United States and India for the procurement of coal-derived ammonia, which is essential for urea production. The risk of such a structure that is almost entirely dependent on imports from a specific country has been experienced by China’s rare earth export restrictions and Japan’s semiconductor-related material regulations. When did you call for the localization of the production of materials, parts, and equipment, and it is pathetic that this situation is still repeated.