Estimating markets / prices

Fig. 20.1 Development of PGM prices 1930-2002 in US per troy oz (1 troy oz = 31.10 g) (Kendall 2002a,b Hilliard, 1999) (1930-1966 Producer price at New York of 99% pure Ir, 99.5% pure Os, 99.9% pure Pt, Pd and Rh 1967-1998 estimated market price for minimum 99% pure Ir, 99.5% Pure Os. For more details, see Hilliard (1999).

Fio. 2. Relationship between estimated market price and market volume of a number of different plant products. The upper line represents the relation between the cost-price of a product produced by means of plant cell biotechnology and yearly production, at the current state of the art. The lower line is calculated from more optimistic figures and therefore represents a future situation. Products situated between the lines might be interesting goals for plant cell biotechnology in the near future. 

The estimated capacity of formamide was approximately 100,000 t/yr worldwide in 1990. In 1993, there are only three significant producers BASE in Germany is the leading manufacturer. Smaller quantities of formamide are produced in the former Czechoslovakia (Sokolov) and Japan (Nitto) by direct synthesis from carbon monoxide and ammonia. Most of the formamide produced is utilized direcdy by the manufacturers. The market price for formamide (ca 1993) is about 2.00/kg. 

Methyl cyanoacetate and ethyl cyanoacetate are produced by Lonza ia Switzerland and Hbls ia the United States, as well as Juzen and Tateyama ia Japan. The total production capacity is estimated to be ia the range of 10,000 metric tons per year. The market price for both esters ia bulk shipments was around 6/kg ia 1993. 

The cost of various silver compounds is a function of the silver market price. In 1980, the estimated usage of silver ia the United States was 3730 metric tons (120 X 10 troy oz) (23). This silver is derived from silver mined within the United States silver recycled or reclaimed from secondary sources, eg, coiaage, flatware, jewelry, and photographic materials and imported silver. In 1980, Canada, Mexico, and Pern, the principal exporters of silver to the United States, shipped 1670 tons (53.8 x 10 troy oz) as silver buUion and silver compounds. U.S. imported 2799 t and exported 964 t ia 1988 (23). 

Plast. Technol 37 (Dec. current market price estimates, 1991). 

The revealed preference method is an indirect approach that is used in order to monetize use values. This method observes the real choice between money and the environmental goods. Methods often include observations of consumers or producers behaviour or actions, such as the hedonic price method and the production function method. The hedonic price method determines values from actual market transactions. These transactions are used to see how the price of a market commodity varies when a related environmental good changes, such as the effects of noise or air pollution on house prices. The production function method is used to estimate the value of the environmental effects on production. This method is suitable when consumption or production of a private good is affected by the environmental good. An example is the valuation of ground-level ozone levels by valuing the impact on the production of wheat or timber, which has market prices. The problem with the revealed preference method is that it does not contain all the individuals values that affect the WTP. 

The important question of comparative value, mentioned earlier in Section 6, now must be considered. The material output of each process per unit of feed is estimated and multiplied by the market price of the material to arrive at a value of product. The output of the methanolysis processes, DMT and EG, are shown as a methanolysis-type product value in Table 16.5. The stoichiometric ratios are adjusted with a presumed 99 % recovery of DMT and 93 % recovery of EG. The output of the hydrolysis processes, TPA and EG, have the stoichiometric ratios adjusted for a presumed 99 % recovery of TPA and 93 % recovery of EG. The glycolysis processes, including methanolysis/BHET hybrid, are valued at 99 % recovery of terephthalic acid, 95 % recovery of ethylene glycol, and a US 0.022/kg esterification credit for making BHET. The EG recovery is higher for glycolysis-type products because of less loss of useful moieties. The three... 

The market prices used in this study represent multiple year averages for the 1990s in the United States. The capital requirements and economic estimates here presented represent the views of this present author based on interpretations of publicly available documents and are not based on any confidential information. The economic calculations follow good engineering principles and generally accepted accounting procedures, but are not guarantees of specific outcomes. 

Fig. 3. Cost comparison of different routes to 1,3-propanediol [74], Production costs for the chemical processes and glucose route are based on estimations from ChemSystems. Estimations for the glycerol processes are based on US market prices of raw materials in 1998 and a production scale of 65,000 t/a. The energy costs for the glucose process are assumed to be the same as the fed-batch glycerol process...

Chitosan Chitosan has a molecular structure similar to cellulose. This material is produced from chitin, which is widely found in the exoskeleton of shellfish and crustaceans. Chitin is the second most abundant natural biopolymer after cellulose. Chitosan is a good adsorbent for all heavy metals. It has been estimated that chitosan can be produced from shellfish and crustaceans at a market price of 15.43 /kg. 

Once we had clearly defined these objectives we were able to conduct a much more specific market survey. We did add one more important property, an estimated selling price. This program led to the development of a new plastic which will be discussed later. 

The first stage in evaluating the profitability of a proposed new product is to compare the total cost of the product (for example, per tonne produced) with the current market price. It is also necessary to estimate future demand for the product, and to determine the trend in the selling price over several previous years. It is also necessary to estimate the number of years that the product can be sold at a satisfactory profit, this is more useful than estimating the possible operating life of a plant Backhurst and Harker (1973 p.47) make the following observation ... 

The market price for DDG has ranged between 80 and 100/t in recent years (13,15). Assuming that 6.5 lb of DDG is generated per gallon of ethanol produced (15,16), the estimated coproduct value is 0.26/gal of ethanol using the conservative price of 80/1 of DDG. 

Plant investment was prepared by the Dravo Corp. Gas price was presented on the basis of "a typical utilities guidelines which differed in many details from the utility financing method of C. F. Braun. In the case of COGAS, liquid product credit has a substantial effect on the gas price. In the paper this credit was at current market prices of 15.40/bbl for No. 4 fuel oil and 16.80 for naphtha. The resulting plant tailgate gas price on a 20-year operating time DCF basis was 5.08/MMBtu. However, if the liquids and gas are priced on an equivalent Btu basis, the fuel oil would be 25/bbl, the naphtha 27/bbl and the gas 4.10/MMBtu. These latter liquid prices are in the range of those estimated for liquids from coal by other processes. 

The questions of market insecurity and market price reminds me of a study the ESCOE recently completed. We were asked to do a coal fuel cycle study. The study was an examination of all the possible ways that coal from a mine could be processed and transported to deliver energy to "the city gate." After many, many pages of looking at all of the alternatives and the best estimates of price that go along with these, we were asked if it was possible to reduce the study conclusions to a single sentence. The answer is "Yes. The cheapest way to use coal is to burn it."... 

Rendering produced an estimated 4.18 million metric tons of animal fats was produced in the United States in 2000 by rendering.87 Of this amount, approximately 18 percent and 6 percent were edible tallow and lard, respectively, and 41 percent and 35 percent were inedible tallow and grease. Approximately 15 percent and 34 percent of the edible tallow and lard, respectively, and 37 percent of the inedible tallow and grease were exported. Of the inedible tallow and grease used in the United States, an estimated 75 percent was used as animal feed, 16 percent was converted to fatty acids by the oleochemicals industry, 4 percent was used in soaps, and 3 percent in lubricants. Inedible animal fats are the lowest cost domestic fat sources. Their market price per pound sometimes is less than fuel oil, and rendering plants have chosen to bum them as fuels. In 2001, animal fats were included with vegetable oils for federally supported trials of biodiesel fuel. 

Direct price quotations from prospective suppliers are preferable to published market prices. For preliminary cost analyses, market prices are often used for estimating raw-material costs. These values are published regularly in journals such as the Chemical Marketing Reporter (formerly the Oil, Paint, and Drug Reporter ). 

Please prepare a preliminary design for the proposed plant. This design will be surveyed by the Process Development Division and used as a basis for further decisions on the proposed plant. Make your report as complete as possible, including a detailed description of your recommended process, specifications and cost estimates for the different pieces of equipment, total capital investment, and estimated return on the investment assuming we can sell all our product at the prevailing market price. We shall also be interested in receiving an outline of the type and amount of labor required, the operating procedure, and analytical procedures necessary. 

Given the occasional wild swings on the stock market, does the market price of an investment really reflect an unbiased estimate of the true value of that investment In addressing this question, we should perhaps start by defining what we mean by the terms. 

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