South Korean firms have set out to secure urea or urea solution using their global networks with foreign partners in an effort to help alleviate the domestic shortage of an additive critical for diesel cars.
According to figures gathered by The Korea Herald, some 64 million liters of urea solution, or diesel exhaust liquid, has been sourced by the corporate sector.
The supply accounts for more than two-thirds of some 82 million liters of urea solution the government said would be imported through the beginning of next year. The total amounts to a five-month stockpile, based on past data that showed at least 600,000 liters of urea solution are needed on a daily basis for some 4 million diesel cars -- including 2 million cargo trucks -- in the country.
Lotte Fine Chemical, the country’s biggest urea solution manufacturer, said that it has signed deals with companies in Vietnam, Saudi Arabia, Japan, Russia and Indonesia to secure a total of 12,000 metric tons of urea, which is needed to make urea solution.
Lotte Fine Chemical will produce 58 million liters of urea solution at its factory, which shut down on Nov. 5 due to low urea inventory, with additional 6,500 tons of urea which had passed inspections for export in China and some 700 tons the government was able to secure through a crackdown on hoarding. The amount that will be produced equals to at least a two-month stockpile for the country.
Industry insiders said it was Lotte Group Chairman Shin Dong-bin who stepped in to secure the supply, using his global network of foreign partners like Japan’s Mitsui Chemicals.
LX International, a general trading arm of LX Holdings, has also secured 2.7 million liters of urea solution and 1,100 tons of urea since last week, through signing contracts with firms in China, Vietnam, Malaysia, Singapore and Thailand, according to the company.
Posco International, steelmaking conglomerate Posco’s trading unit, is bringing 180,000 liters of urea solution through new deals signed in Australia and Mexico.
It will take between two weeks to two months for the supplies to arrive in the country, the firms said.
Under emergency control measures, the government has been distributing the current reserves to civilian ambulances, public buses and garbage trucks by priority. Authorities said they have been seeking to secure additional supply from Vietnam and Saudi Arabia, after bringing in supply from Australia and negotiating on Chinese imports last week.
South Korea has been grappling with a supply crunch of urea and urea solution after China tightened its inspection criteria for fertilizers including urea in mid-October, citing a power shortage due to lack of coal. Coal is the main feedstock of urea production.
Korea relies almost entirely on China for the urea it uses. Korea Customs Service data shows that this year alone, from January to September, 97.6 percent of the country’s urea imports for diesel exhaust fluid came from China.