China’s Export Curbs on Additive Causing Diesel Fuel Shortage in South Korea
This is just another example that a country should not rely on China for key ingredients in their supply chain for critical needs especially something as important as diesel fuel:
South Korea said Sunday it plans to import urea water solution, a key material used in diesel vehicles to reduce emissions, from Australia this week in a bid to ease its supply shortage that has caused soaring prices.
The government has decided to mobilize military aircraft to bring 20,000 liters of urea solution from Australia, the finance ministry said after a meeting on security and the economy.
“The country plans to mobilize all available diplomatic channels to import thousands of tonnes of urea within this year not only from Australia but also from other countries, including Vietnam,” the government said.
South Korea has been grappling with a shortage of urea water solution, known as diesel exhaust fluid, in recent weeks, as China tightened exports of fertilizers and related materials, including urea, in October amid a power crisis caused by a coal supply shortage. Coal is the main feedstock for urea.
South Korea heavily relies on China for its supply of urea water solution, as 97.6 percent of its import came from China in the first nine months of this year. In around 2013, local manufacturers of urea shut down business as they lost price competitiveness over foreign rivals, such as China and Russia.
In Korea, a relatively high portion of diesel cars caused a shortage of urea water solution.
Yonhap
You can read more at the link.
Sounds complex. What could possibly be in “urea water”?
Let’s see if the internet can help…
…”made with 32.5% urea and 67.5% deionized water”.
Well. We are 67.5% there.
Which was caused by China relying critically on Australian coal. Lack of power generation due to lack of Australian coal meant China had no choice but to cut the production of urea to conserve energy.
It was a nice long spell of cleaner air in South Korea while the Australian coal went absent in China. Australia really shouldn’t sell any more coals to China, and South Korea should move away from so many diesel cars.
GI Korea got the title wrong.
It’s not a diesel fuel shortage but a shortage of a liquid that helps cut down on emissions.
Also, the latest diesel engines are designed to not work if the liquid is not in the tank, which makes it a serious problem for trucking and bus companies.
The thing about Korean companies is that they have a tendency to all rush into something without thinking, if a few companies make money off that something or the current trend dictates that something is good,
During the early part of this century, China was that something, and Koreans companies all rushed into the Chinese market or decided to import pretty much eveything from the “cheaper” Chinese producers without giving thought of what would happen next.
Of course with THAAD and other hiccups with China we all know what that rush was a big mistake.
As for Japan, it seems like they are self sufficient in urea water solution with three major producers producing them domestically, which means they can ride this out.
Since Korea isn’t in good terms with Japan, it is going all the way to Australia to get what it needs.
That’s what we call the free market principle. In that South Korea is like the United States. It doesn’t matter if the producer is a Chinese, Japanese, American, or South Korean company, as long as they provide products and services that cost less and have good quality. It didn’t make any sense for Korean companies to cling to polluting low-tech money-losing urea industry when other countries can make them cheaper and provide those products at a fraction of their cost compared to Korean companies.
But this was before the THAAD thing, and Japan starting their trade war with Korea two years ago. Now that those two countries have become infamous for using trade as political weapons against South Korea, things are going to change from now on. Not that the low-tech urea industry will make a comeback. Instead, the researchers are just wrapping up a short-term solution by unveiling the new materials technology that will soon end the use of urea for diesel vehicles. And of course, Korea’s long-term goal is to develop a hydrogen economy where hydrogen will power those trucks and buses. No need to restart dirty industries like urea and no need for import diversifications either.
Japan doesn’t rely as much as Korea on diesel-powered vehicles though. They rely more on hybrid power rather than diesel for passenger vehicles – so they have far less need for this material compared to Korea. Which begs the question, why they are still willing to cling to a loss-making industry. Because they are not a true market economy. For instance, 80% of the stocks in the Tokyo stock exchange are owned by the Japanese government who are propping up their failing economy. Yes, they are so prepared and self-sufficient that they’re begging Taiwan’s TSMC semiconductor company to set up a factory in Japan, making 28 to 40 nanochips (low tech chips) at a time when both Korea and Taiwan are competing to be the first ones to make the 3 nanochips. That was sarcasm if you didn’t get it.
This weird undercover lovefest with Japan started when the leftists in Korean politics started gaining ascendancy. The Chrysanthemum Crowd didn’t just start something a couple years ago. They’ve been the same “lovable” folks since Hideoshi was paying soldiers by the noses they collected.
Lately, Koreans have changed the conversation, as markets opened in China. Not all of the old Korean people who lived under Japanese rule hated them. The Chinese, on the other hand, have always been in competition with the Japanese for control of Korea.
Follow the money. Find out who cannot be criticized. Then you find out the source of the hate.
setnaffa, “this weird undercover lovefest with Japan” could be taken word for word to describe you American’s obsessive hatefest with China lol.
I almost spit out my coffee reading this comment.
Beijing Central just ain’t paying enough to hire competent trolls.
Kinda makes me sad.
Maybe after Christmas, if we’ve been good all year…