SEOUL, Nov. 8 (Korea Bizwire) — South Korea’s biggest producer of urea water has lowered its output amid a growing shortage of urea, industry sources said Monday.
Lotte Fine Chemical Co. has stopped part of the urea water solution production line at its factory in Ulsan, about 400 kilometers southeast of Seoul, since last week, as China restricted the exports of urea last month.
Lotte Fine Chemical produces about 140,000 tons of urea water solution, also known as diesel exhaust fluid, on an annual basis, accounting for 50 percent of the domestic market share.
“It is not a complete suspension, but part of the production has stopped,” a company official said. “The operating rate has dropped.”
Its production line is expected to last by the end of this month with its remaining urea inventory, and its output will probably stop next month, according to company officials.
South Korea has been grappling with the shortage of urea water solution and its surging prices 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 imports came from China in the first nine months of this year.
To help ease the supply shortage, the government said it will import some 27,000 liters of urea water solution from Australia and seeks to import 10,000 tons of urea from Vietnam.
Authorities have also begun crackdowns on excessive hoarding and its illegal distribution to deter market manipulation attempts.