Two years ago, the shadow once again loomed over South Korea

Author|Brother Mao

Source: Big Cat True Detective Agency

The story of 2 years ago may have to be played out again?

No, no, South Korea's minister came out to appease and called on South Koreans not to panic, South Korea's urea stocks are sufficient, there is a supply of 3 months, and there will be no "urea shortage" in 2021.

However, the appeasement of officials does not seem to have much effect, why?

On November 30, China suspended the customs clearance process of urea, no way, the premise of export, is to ensure domestic supply first, China also has to plan for the upcoming spring ploughing, stabilize prices, ensure supply.

There is no way, China's urea consumption is also rising, especially in the agricultural field and vehicle urea and power denitrification urea, consumption is rising, but the production capacity is so much, and it is also facing technological transformation and elimination, and the pressure is not small.

Koreans say that there will be no recurrence of the urea shortage, but they are still visibly panicked.

The first response was to consult with China to understand the intentions, and agreed on a department-level consultation mechanism to discuss supply chain solutions for multiple varieties, including urea.

And South Korea also has more internal actions:

1. Increase the public reserve of vehicle urea solution from 6,000 tons to 12,000 tons;

2. Release 2,000 tons of reserves in advance to solve the immediate problem;

3. Limit the purchase of truck owners and gas stations and call on everyone not to over-hoard;

4. Isn't it more expensive to import urea from a third country, the South Korean government said that it will subsidize this part of the money.

But after all, South Korea's dependence on China for urea has reached 90%, so South Korea is also hyping the so-called "supply chain risk of imports from China", even if Yonhap News Agency has said that this is a supply problem, not a political issue.

Urea can be said to affect the whole body.

South Korea's urea is mainly used for vehicles, and Koreans have first-hand experience of the impact of urea shortage.

In 2021, it was also in these two months that there was a urea shortage in South Korea.

Originally, urea was a niche industrial product, but there were too many diesel cars in South Korea, 40% of the country's cars were diesel vehicles, and the total amount was about to exceed 10 million.

Moreover, the most important thing is that in South Korea's small land area, logistics mainly depends on trucks, if there is a lack of urea, the car will not be able to drive, and once the logistics system is paralyzed, this is not a matter of fruits, vegetables and meat fresh rotting in the car, behind the face is soaring prices.

At that time, because of the shortage of urea, even if the price had almost doubled, the gas station was full of people buying urea.

In the black market, urea has reached a sky-high price, more than 10 times.

Then, the South Koreans experienced a paralysis of the whole national logistics, and then the transmission of the rise in industrial product prices to the consumer side was extremely rapid, and the prices in South Korea rose rapidly, and a kilogram of beef could be sold for more than 1,000 yuan at that time.

Two years later, South Koreans still have fears for 2021.

Why is there a shortage again?

In 2021, South Korea's dependence on China for automotive urea was 97.6%, which can be said to be completely dependent, and now, 90%, in the past two years, has decreased by more than 7 points.

However, it is far from enough.

Although urea is a chemical product, in fact, it is still linked to energy, and its pre-process is synthetic ammonia, and one of the raw materials for synthetic ammonia is coal, natural gas, coke oven gas, etc.

Can South Korea do it on its own? Yes, but it's expensive.

Why do the chaebols engage in industry? Naturally, they make money, but South Korea produces its own urea, and it does not make money.

If you want energy, it doesn't have it, you want a market, and it doesn't have that big market, and China, with a whole set of processes, is very skillful, and the price is cheap, and it has become the world's largest producer and exporter of urea.

However, the main consumption of urea in China is still in China.

In 2022, the national urea output will be 57.61 million tons, of which 54 million tons will be domestic consumption, and exports will only be 2.831 million tons, accounting for less than 5%.

At that time, it was planned to import 360,000 tons and 120,000 tons per year in Vietnam, which was almost one-third of the annual import volume, and Indonesia had 10,000 tons in three years.

As a result, after two years, we have also seen the results, which is better than nothing.

Last time, South Korea had a urea shortage, and South Korea counted out the bottom line, and finally relied on imports from China to solve it.

This time, I'm afraid I still have to wait for China's urea, but until then, I can only suffer the Koreans.