On the afternoon of the 23rd, at a gas station office in Gangnam District, Seoul. The expression of Oh, a 60-year-old gas station operator who was looking at a computer screen, hardened. On the manager's product ordering site, 10-liter (L) urea solution products were lined up as "preparing product." They were effectively sold out.
After moving the mouse a few more times, Oh sighed and said, "To secure urea solution, I'm thinking of calling my personal clients starting tomorrow morning."
◇ Urea solution surges 2.5 times… "Signs of panic buying"
With the Strait of Hormuz effectively shut down for an extended period due to the Middle East crisis, concerns are mounting that the so-called "urea solution chaos" could repeat. As people try to buy in advance, the price of urea solution has jumped, and major online malls are sold out, showing signs of "panic buying."
Urea solution is an essential consumable used to break down nitrogen oxides emitted by diesel vehicles into water and nitrogen. Since 2016, diesel vehicles produced or imported are required to be equipped with a selective catalytic reduction (SCR) system, and vehicles with this device cannot start without urea solution. That is why urea solution is effectively called a "second fuel."
According to the online shopping price tracker "Polcent" on the 24th, a 10L domestic urea solution product is selling for 29,900 won. That is about 2.5 times higher than 11,920 won a month ago. During the same period, the price of another company's 10L urea solution also rose from 19,690 won to 36,520 won, roughly doubling.
Gas station owners said there are also "signs of panic buying" of urea solution. A person surnamed Park, 57, who works at a company-operated gas station in Gangnam District, Seoul, said, "Normally, about one person a month would come to buy urea solution, but last week alone three people came and each bought two to three containers."
The burden has especially grown for truck drivers who use a lot of urea solution. A truck driver surnamed Park, 40, said, "I fill urea solution about once every three days, and the expense has risen to about 1.5 to 2 times what it used to be," adding, "Even before the 2021 chaos, the most commonly used 10-liter product sold out first."
On an online community used by truck drivers, reactions continued such as, "With already expensive fuel prices and now soaring urea solution prices, the outlook is bleak."
◇ Supply chain shaken by Middle East factors… "Still 100 days of inventory"
Behind such unease is a problem with the supply of urea feedstock. Urea, the key raw material for urea solution, is largely imported, and as tensions between the United States and Israel on one side and Iran on the other intensify, concerns are growing that Middle East supply chains could be disrupted. In particular, if the Strait of Hormuz is blocked, logistical disruptions are inevitable.
According to Korea International Trade Association trade statistics, from January to February this year, urea imports totaled $57,281,000 (about 85 billion won). Of that, $19,827,000 (34.6%) came from China, the largest share. It was followed by Saudi Arabia ($11,407,000, 19.9%) and Qatar ($10,111,000, 17.7%), with Middle Eastern countries accounting for more than one-third.
In 2021, when the urea solution crisis occurred, reliance on China reached 66.6% ($278,417,000), but since then the supply chain has diversified. The share from Saudi Arabia rose more than 30-fold, from 0.6% to 19.9%, and Qatar also expanded more than threefold, from 5.2% to 17.7%. That means dependence on Middle East factors has increased by that much.
However, the industry says it is not yet at a stage to worry about a urea solution crisis. A person at a urea solution manufacturer said, "The government called in urea solution companies last week to review the situation, and we currently have inventory that can supply the market for more than 100 days."