The South Korean government has decided to relax the criteria for determining hoarding of urea and urea solution while extending related regulations until the end of October. Although supply conditions have improved following China's lifting of export controls, the government aims to maintain regulatory frameworks in anticipation of uncertainties arising from the ongoing conflict in the Middle East.
On August 20, a meeting of the Emergency Economic Headquarters, chaired by Deputy Prime Minister and Minister of Economy and Finance Koo Yun-cheol, discussed the operational measures for the hoarding prohibition regulations.
Currently, importers, manufacturers, and sellers of urea solution are deemed to be hoarding if they store quantities exceeding 150% of the average monthly sales from the previous year for more than seven days. Starting September 1, this threshold will be raised to 200%, allowing companies to increase their inventory levels.
The application period for these regulations will be extended from August 31 to October 31. This approach aims to alleviate the inventory burden on manufacturers and distributors while maintaining a management system to respond to emergencies.
The government has assessed that the domestic supply of urea is stabilizing. Combined public reserves and private stocks currently hold a level equivalent to 3 to 4 months of normal supply.
With China allocating an export quota of approximately 2 million tons, the conditions for imports are expected to improve. Domestic companies are in the process of securing contracts for 7,000 tons of Chinese urea, which corresponds to about one month’s usage.
The prohibition on hoarding for medical syringes and needles will also be extended until the end of October. This measure considers the potential instability in the supply of raw materials, such as naphtha, due to the situation in the Middle East.
Inventory levels for syringe and needle manufacturers increased from 49.77 million units in the first week of May to 69.54 million units in the second week of August. Last month, the government relaxed the storage standard from 150% to 200% of the previous year’s average monthly sales and lifted sales volume restrictions.
Currently, manufacturers and sellers are considered to be hoarding if they store quantities exceeding 200% of the average monthly sales for more than five days. This time, the government will not change the criteria but will only extend the application period.
The government plans to monitor the developments in the Middle East conflict and the supply and distribution trends of urea and medical supplies to determine whether to extend the regulations further. The hoarding prohibition for petroleum products, which is currently in effect alongside a price cap, will remain in place until September 12.
* This article has been translated by AI.
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