SEOUL, Nov. 26 (Korea Bizwire) — South Korea on Friday launched an early warning system to monitor some 4,000 key industry materials and items to prevent the recurrence of a crisis similar to the ongoing supply crunch of urea solution used to reduce emissions in diesel vehicles.
The shortage of urea solution has exposed vulnerabilities in the country’s supply chain and prompted the government to set up a task force on economic security meant to ensure stable supply chains.
Items listed on the early warning system include magnesium, tungsten, neodymium and lithium hydroxide, according to the Ministry of Economy and Finance.
The items were added to the list if more than half of their supplies come from specific nations, and if intensive monitoring is deemed necessary given their features, the ministry said after an inaugural meeting of the task force.
Also on the list were those critical for the economy and the industry, and closely linked to the everyday lives of people, according to the ministry.
Of them, around 100 to 200 materials will come under intensive monitoring, and the government will devise approaches tailored to each item, such as the diversification of import channels and the establishment of local production facilities.
“Our initial review found several key materials linked to such major industries as semiconductors, autos, and battery cells (for electric vehicles) are heavily dependent on imports from a handful of nations, and their global prices have been very much in flux this year, indicating supply chain risks.”
“The government will classify the 4,000 items in accordance with their potential impacts on the economy and other factors so as to manage the system more effectively,” it added.
South Korea has suffered from the supply shortage of urea solution, an essential fluid needed in diesel cars to cut emissions, following China’s export curbs on urea to ease domestic supply bottlenecks.
A whopping 97.6 percent of Seoul’s urea imports came from China in the first nine months of this year, according to government data.