Panic in South Korea over China's tightened exports of urea

China's tightening of exports of urea to South Korea have triggered panic among South Korean drivers and prompted the presidency to set up a task force to find alternative suppliers.

Desperate South Korean drivers looking for urea solutions, also known as diesel exhaust fluid, were sharing locations of gas stations that still had inventory, while those who had stocked up ahead were selling at steep markups.

Local broadcasters featured gas stations that put up signs that read "Urea solution SOLD OUT".

Diesel cars represent 40 percent of registered motor vehicles in South Korea as of August, government data showed, after South Korea in 2015 made it mandatory for diesel cars to use urea solutions to control emissions.

South Korea is heavily reliant on China for urea. About 97 percent of imports came from China between January and September, according to the trade ministry, up about 8 percent from a year ago.

Prices of industrial urea in South Korea jumped more than 80 percent to $483 per tonnes in September from October 2020, said the trade ministry.

Task force set up

South Korea's presidential office set up a task force on Friday to negotiate supplies from producer states.

The task force will ensure adequate supply of urea by initiating diplomatic consultation with producer countries like China, the presidential press secretary, Park Soo-hyun, said in a statement on Friday.

Diversifying supply will not be easy as South Korea has become far too dependent on China, an official at a major South Korean urea suppliers told Reuters.

"We have signed contracts with Russia in October and it is only going to arrive in January. Yet again they are only about 10 percent of what we used to get from China," the official said. Inventory is likely to be depleted after November, he added.

China's ban of urea exports was aimed at assuring supplies in its domestic market.

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