“AdBlue sales in the first two weeks of December are 300 per cent higher than the same full month last year with demand increasing since late November,” an Autobarn spokeswoman said on Monday.
“We have limited stock levels across some Autobarn and Autopro stores but expect to sell out in the next week”.
Simon Henry, the chief executive of DGL Group, which makes about 60 per cent of Australia’s AdBlue from a plant in Queensland, said a global bidding war had begun for the limited stocks of high-grade urea being sought after by manufacturers in many countries. Urea is a key component of the fluid.
AdBlue is automatically injected from a separate small tank into a vehicle’s exhaust system to help reduce emissions of nitrogen oxide. The fluid is a mixture of urea and deionised water.
“We’re effectively in a bidding war on an hourly basis,” Mr Henry said.
China had cut off exports, and other Asian countries were also scrambling.
He said his company was working on all options to increase supply, and investigating flying stock in via cargo planes, with shipping lanes extremely slow because of the global supply chain disruption which had hit many industries.
“The shipping is still very hard work,” Mr Henry said. “We’ve got a trickle coming in.”
DGL Group bought Queensland-based AusBlue in October. AusBlue has keeping aside stock in its warehouses for emergency services vehicles. “We’ve been rationing that,” he said.
Mr Henry said the whole-of-government approach via a Federal taskforce was smart, and he believed the situation would return to normal by April.
“It’s a very good idea. I’ve been impressed by the intensity at which things have been moving,” he said.
Large trucking fleets are the major users of AdBlue. Ampol has put up signs at its service stations explaining the shortage of AdBlue and asking customers to limit their purchases.
Federal Energy Minister Angus Taylor has warned against panic buying of AdBlue saying there was about seven weeks stock either in Australia or en route.
Australian Industry Group Innes Willox said the Productivity Commission report into supply chain vulnerabilities in August had not mentioned the diesel supplement as a likely problem.
“It is interesting that neither urea nor AdBlue were identified in this report as an area of concern, yet Ai Group members are calling us concerned about the risks to their transport fleets,” Mr Willox said.
“This demonstrates how difficult it is to predict which supply chains are at risk. Uncertainty can cause more damage than actual shortages, and the recent nervousness around urea and AdBlue is illustrating how vulnerable our supply chains can be and a lack of understanding of those vulnerabilities.”
Federal Chamber of Automotive Industries director of innovation and strategic engagement Peter Griffin said for the moment the AdBlue shortage would mostly affect big industrial users.
“In the short term this is likely to impact larger vehicles rather than passenger vehicles. However, we are keeping a close watch as this develops and liaising with any of our members who may be impacted,” he said.