South Korea is currently facing a tight urea situation as China suspended exports of urea solution to South Korea. South Korea** has actively sought China's help, and the latest news shows that the two sides seem to have made progress, and China is expected to extend a helping hand to South Korea. In this case, South Korea's dependence on China and the limits of its own response are clear. However, we also need to look at the problem rationally, understand the real reasons for China's suspension of urea exports, and think about how to strengthen the cooperative relationship between the two countries. The following section will discuss South Korea's dependence on Chinese urea, the limitations of South Korea's independent production and diversification of imports, and the reasons why China has suspended urea exports.
South Korea is highly dependent on China for urea imports, and China has been the main leader of South Korea's urea in recent years. According to statistics, in 2019, South Korea imported about 290,000 tons of production and vehicle urea, of which more than 90% of industrial urea was imported from China. South Korea** had planned to address the problem through in-house production and import diversification, but these plans did not materialize due to lack of competitiveness and other realities.
In terms of in-house production, there used to be urea production enterprises in South Korea, but due to a lack of competitiveness, these companies were shut down around 2010. Urea is an important chemical, but it does not contribute much to South Korea's economic interests, so South Korea's ** and companies are reluctant to invest too much in it, and eventually abandon the plan to produce urea in-house.
As for import diversification, South Korea** has said that it can look for cooperation with other countries, such as Vietnam and Qatar. However, South Korean companies generally believe that it is more convenient and less expensive to buy urea near China. If Korean companies choose to buy urea over long distances, shipping costs will become a very large cost, so diversification of imports is not feasible.
To sum up, South Korea currently wants to solve the difficulty of urea**, and China is the best choice and one of the few options.
There is some misunderstanding in South Korea about China's suspension of urea exports. Some people believe that China's restriction of urea exports is for political purposes, but in fact, the reason why China took this measure is for domestic considerations, not political reasons.
Urea** began to grow rapidly in June this year, with exports surging and domestic inventories continuing to decline. If no measures are taken, China will also be affected domestically. In order to ensure domestic urea, China has notified some major urea exporters to temporarily suspend the signing of new export agreements and ensure that the domestic market is preferred. The China Nitrogen Fertilizer Industry Association also made it clear that it will give priority to ensuring domestic urea**. These measures show that China's suspension of urea exports is justified rather than political.
Therefore, the concerns and speculations in South Korea about China's suspension of urea exports are not reasonable, and the matter should be viewed objectively and rationally.
The risk of a "urea shortage" in South Korea is not inevitable. As China's neighbor, South Korea's dependence on China objectively exists. South Korea's enterprises should be soberly aware of this and establish an objective and rational attitude towards China. In contrast, the infeasibility of producing urea in-house and the restrictions on diversifying imports make seeking Chinese assistance the best option for South Korea.
In dealing with this issue, there is a reason for China's suspension of urea exports, and it should not be misconstrued as politically motivated. South Korea should properly understand China's decision-making and re-examine the importance of cooperation with China. There is a broad space for cooperation between China and South Korea, and through joint efforts, the cooperation between the two sides can be further deepened and a win-win situation can be achieved.