Example commodity

Let us look at another example. Commodity chemicals, too, suffer from potential overreactions - not, in this case, because of wrong estimations of growth opportunities, but because capital markets are fooled to some extent by the industry s marked cyclicality. 

Each type of material requires different levels and types of support. For example, commodities require the least technical support, while technical and high-performance materials require the most. On the contrary, commodities require more investment in logistics than do high-performance materials. The impact on the business is subtle—increased R D support is a direct expense, and normally runs between 2% and 5% of sales, whereas increased logistics support is likely to be in the form of additional investment in storage and transport, showing up in financial statements as depreciation and maintenance costs. Depreciation must be written off over a period of years, which tends to conceal its real cost (and increases taxable income). While some companies do capitalize and depreciate R D expenses, this is usually avoided unless the work results in a patent. 

It is likely that volumetric measures were used for quantity deterrnination when commodities were first bartered however, it has been established with certainty that weighing scales or balances have been in use for at least 7,000 years (1). Measuring by weight instead of by volume eliminates some very considerable inaccuracies from, for example, changes in specific gravity of liquids with temperature, or changes in density of solids owing to voids. 

A conservative estimate of the total value of the products from the mineral industry is ca 3.9 trillion ia terms of 1992 dollars (4). This estimate does not include the value of products derived from secondary sources such as recycling (qv) or reclamation. Secondary recovery is significant for certain commodities. For example, in 1992 ca 30% of the world steel (qv) production, 46% of the world refined lead output, 15% of the world refined copper (qv) production, and ca 30% of the aluminum (see Aluminumand ALUMINUM alloys) output from the Western world were clearly identified as being derived from scrap. The value of the world mineral commodity export trade in 1992 was ca 616,698 million ia 1992 dollars. This accounted for ca 18% of all commodities exported (4). 

Blending with LLDPE is used to upgrade the properties and improve the processing of conventional LDPE. For example, by adding 25% of ethylene—1-butene LLDPE resin with I2 of 0.5 to conventional LDPE resin, the dart impact strength of 75 p.m film is increased from 490 to 560 g, the puncture strength from 41 to 49 J /mm (770-920 ft-lbf/in.), and the tear strength from 43 to 63 N /mm (246—360 ppi). CompositionaHy uniform VLDPE resins are used in blends with HDPE, commodity LLDPE, and polypropylene (PP) (70,71,89). 

Perhaps the most familiar example in the specialty items category is the consumer electronics market which consists primarily of solar-powered calculators and watches. Although volumes are large in terms of units sold, the revenues are relatively small. Further, the competition is fierce for any photovoltaics manufacturer who seeks to sell commodity solar cells to the consumer goods producer. 

The level of technical service support provided for a given product generally tracks in large part where the suppHer considers thek product to be located within the spectmm of commodity to specialty chemicals. Technical service support levels for pure chemicals usually provided in large quantities for specific synthetic or processing needs, eg, ammonia (qv), sulfuric acid (see SuLFURic ACID AND SULFURTRIOXIDe), formaldehyde (qv), oxygen (qv), and so forth, are considerably less than for more complex materials or blends of materials provided for multistep downstream processes. Examples of the latter are many polymers, colorants, flocculants, impact modifiers, associative thickeners, etc. For the former materials, providing specifications of purity and physical properties often comprises the full extent of technical service requked or expected by customers. These materials are termed undifferentiated chemicals (9),... 

The largest class of processes appHed to farm commodities are separations, which are usually based on some physical property such as density, particle size, or solubiHty. For example, the milling process for cereal grains involves size reduction (qv) foUowed by screening to yield products that have varied concentrations of starch, fiber, and protein. Milling of water slurries is practiced to obtain finer separation of starch, fiber, protein, and oil. 

A rather impressive Hst of materials and products are made from renewable resources. For example, per capita consumption of wood is twice that of all metals combined. The ceUulosic fibers, rayon and cellulose acetate, are among the oldest and stiU relatively popular textile fibers and plastics. Soy and other oilseeds, including the cereals, are refined into important commodities such as starch, protein, oil, and their derivatives. The naval stores, turpentine, pine oil, and resin, are stiU important although their sources are changing from the traditional gum and pine stumps to tall oil recovered from pulping. 

If the product is essentially identical to that produced by other manufacturers, then the price is determined principally by the commodity market price. However, contract features such as guaranteed deHvery schedules can influence price. Examples of commodity pricing are petrochemicals, petroleum feedstocks, petroleum products, and primary metals. 

The second law of thermodynamics focuses on the quaUty, or value, of energy. The measure of quaUty is the fraction of a given quantity of energy that can be converted to work. What is valued in energy purchased is the abiUty to do work. Electricity, for example, can be totally converted to work, whereas only a small fraction of the heat rejected to a cooling tower can make this transition. As a result, electricity is a much more valuable and more costly commodity. 

Approved techniques for manual and mechanical sampling are often documented for various commodities handled in commerce by industiy groups. Examples are the International Standards Organization (ISO), British Standards Association (BSA), Japan Institute of Standards (JIS), American Society for Testing Materi s (ASTM), and the Fertihzer Institute. Sampling standards developed for use in specified industry applications frequently include instructions for labora-toiy work in sample preparation and analysis—steps (2) and (3) above. 

Your subcontractors may not need to supply product approval submissions for all parts they supply but there are situations where subcontractor product approval submissions are required. For example, GM requires product approval of all commodities supplied by subcontractors to first tier suppliers. The standard does point out that suppliers are... 

Silicon shows a rich variety of chemical properties and it lies at the heart of much modern technology/ Indeed, it ranges from such bulk commodities as concrete, clays and ceramics, through more chemically modified systems such as soluble silicates, glasses and glazes to the recent industries based on silicone polymers and solid-state electronics devices. The refined technology of ultrapure silicon itself is perhaps the most elegant example of the close relation between chemistry and solid-state physics and has led to numerous developments such as the transistor, printed circuits and microelectronics (p. 332). 

Seventy years ago, nearly all resources for the production of commodities and many technical products were materials derived from natural textiles. Textiles, ropes, canvas, and paper were made of local natural fibers, such as flax and hemp. Some of them are still used today. In 1908, the first composite materials were applied for the fabrication of big quantities of sheets, tubes, and pipes in electrotechnical usage (paper or cotton as reinforcement in sheets made of phenol- or melamine-formaldehyde resins). In 1896, for example, airplane seats and fuel tanks were made of natural fibers with a small content of polymeric binders [1]. 

World trade in coal totaled 576 million tons (524 million tonnes) in 1998, of which 523 million tons (476 million tonnes) shipped in oceangoing vessels. Coal shipments use the same dry bulk vessels that transport other bulk commodities, such as iron ore and bauxite, so vessel rates for coal shipments arc hostage to wider market forces. However, the cyclic pattern observable in vessel rates disguises the long-term trend in which rates have varied little in nominal terms. For example, spot vessel coal rates in the 1998-1999 time period were about the same as in the mid-1980s, varying between 5 and 10 per ton. 

Resource pessimists counter that this process cannot proceed forever because the eternal persistence of demand for any given commodity that is destroyed by use must inevitably lead to its depletion. I lowever, the eternal persistence assumption is not necessarily correct. The life of a solar system apparently is long but finite. Energy sources such as nuclear fusion and solar energy in time could replace more limited resources such as oil and natural gas. Already, oil, gas, nuclear power, and coal from better sources have displaced traditional sources of coal in, for example, Britain, Germany, Japan, and France. 

Fig. 2-7 (a) Generalized tensile stress-strain curve for plastics and (b) example of a commodity plastic s stress-strain diagram. 

Plastic also refers to a material that has a physical characteristic such as plasticity and toughness. The general term commodity plastic, engineering plastic, advanced plastic, advanced reinforced plastic, or advanced plastic composite is used to indicate different performance materials. These terms and others will be reviewed latter in this chapter. Plastics are made into specialty products that have developed into major markets. An example is plastic foams that can provide flexibility to rigidity as well as other desired properties (heat and electrical insulation, toughness, filtration, etc.). 

The costs of an intervention have to be compared with the results of this intervention (Drummond et al. 2004). These results can be outputs, outcomes, and impacts (Fig. 2). An output is the direct result of a production process. Agents of production (resources) are transformed to generate a certain commodity or service (output). For instance, equipment, reagents, and the knowledge of a laboratory technician are used to perform a certain resistance test. Other examples of outputs are contacts, admissions, or prescriptions. 

For decades the problem of stability has plagued colloid chemists and others engaged in the manufacture and use of dispersions. Only a determined practical approach to the solution of this problem has been responsible for the modest accumulation of theoretical knowledge in existence today. In the field of dispersions, for example, problems of physical instability have been solved for paints, pharmaceuticals, adhesives, asphalt, detergents, and commodities used in the graphic arts, in addition to the numerous successful encounters with instability (or sometimes with undesired stability) in the food industry. 

A good example is the relationship between GM at their truck and bus plant in Janesville Wisconsin, and one of their Tier 1 suppliers BetzDearborn. The agreement covers water treatment chemicals, paint, lubricants, commodity chemicals and solvents. For a fixed fee per vehicle manufactured, plus some additional service fees, BetzDearborn provides the following services ... 

A useful way of classifying chemicals is shown in Fig. 2.1. Chemicals are divided on the basis of volume and character. Bulk chemicals, or commodities, are produced in large quantities and sold on the basis of an industry specification. There is essentially no difference in the product from different suppliers. Typical examples would be acetone, ethylene oxide, and phenol. Pseudo commodities are also made in large quantities but are sold on the basis of their performance. In many cases the product is formulated and properties can differ from one supplier to another. Examples include large volume polymers, surfactants, paints, etc. 

Another advantage of biocatalysis is that chemo-, regio-, and stereoselectivities are attainable that are difficult or impossible to achieve by chemical means. A pertinent example is the production of the artificial sweetener, aspartame, which has become somewhat of an industrial commodity. The enzymatic process (Fig. 2.31), operated by the Holland Sweetener Company (a joint venture of DSM and Tosoh), is completely regio- and enantiospecific (Oyama, 1992). 

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