Long-term contracts

When electricity is bought from centralized power generation companies, the price tends to be more stable than fuel costs, since power generation companies tend to negotiate long-term contracts for fuel supply. 

M rko-ting RG.(jUirG.mG.ntS. The primary portion of commodity chemical output is often sold on long-term contracts. Selling and service costs are minimal. Eor specialty chemicals, service and selling costs are likely to be high. 

Economic Aspects. Terephthahc acid and dimethyl terephthalate are usually sold under long-term contracts. Pricing information is at times pubhshed but actual contract prices are not revealed. Price data pubhshed in 1992 were 0.60/kg for terephthahc acid and 0.57/kg for dimethyl terephthalate (42). The price is mainly influenced by the price of -xylene. The price of terephthahc acid is more than dimethyl terephthalate because a kilogram of it produces 17% more polyester. The price of dimethyl terephthalate takes this factor plus a credit for the methanol generated during polyester production into consideration. 

Entities involved in long-term contracts with electric utihties, such as fuel supphers and NUGs selling power to utihties, also have concerns that some utihties or industrial customers will not be able to honor their contracts under the new, more competitive system. Einahy, some utihties are concerned that they wih not be adequately reimbursed for opening up their transmission systems to competitors. The potential competitors in turn are concerned that utihties whl not provide unbiased access to their transmission systems if the utihties themselves are also in business of marketing power. There has also been some debate regarding which transmission facihties are eligible for open access. This is because some facihties are considered local distribution systems by utihties, which feel they should not be opened to competitors. 

Waste treatment costs are those involved with disposing of by-products or off-grade products when these tasks are performed by facilities not directly connected with the plant. These costs are negotiated and vary widely. Sometimes long-term contracts with a guaranteed minimum are demanded. This is especially true if the contractor must build new facilities or expand his present operations in order to process the waste material. Some costs are given in Chapter 16. 

Procurement Standard procedures, product/ pricing mix possible if quantities allow for it, product can usually easily be exchanged Long-term contract with one supplier necessary in order to guarantee constant supply and support, also a guarantee for supplier s risks... 

Even the spot price of most chemicals is under 2 per pound. Spot prices on September 28, 1981, as published by the Chemical Marketing Reporter, indicated that of 2,684 chemicals sold by the pound or kilogram, 1,516 or 56 percent were priced below 2 per pound. About 39 percent were priced below 1 per pound, 19 percent were below 50 cents per pound and 4 percent were below 25 cents per pound. Such prices tend to be higher than the long-term contract prices under which chemicals are usually sold. Thus, the curves in Figure A show the applicable range of costs and output. 

Most uranium, however, is bought on long-term contracts, and between 2000 and 2006 medium- and long-term uranium prices under existing contracts only increased by 20%-45% (WEC, 2007). 

American traders who have been visiting China since the Chinese opened the door to the US continue to meet their share of frustrations. The Chinese are only now allowing foreigners to deal with end-users of the products, but trade continues to be conducted "Chinese style"—that is, the Chinese reluctantly enter into long-term contracts—but there is still an absence of a conventional legal system in which to conduct trade. 

On the other hand, the domestic and international buyers of business and government products are hundreds of hard-nosed professional buyers, who buy in large quantities at regular intervals or by long-term contracts, who have access to technical experts with instruments to measure the quality and performance of the products, have the time and motivation to do comparison shopping, and can exert enormous influence on the sellers, including of prices and terms of payment, of product design... 

Trends revealed in the pages of this Report indicate that the current stabilization could be an important juncture for drug control. Significant stabilizations have occurred and have been sustained in the short term. Continued commitment and momentum at the international level will be one element in continuing these trends and possibly effecting sustainable, long term contraction in each of these markets. 

Perhaps Turkmenistan has assumed a strategic importance of a long-term contract with Russia on natural gas delivery. However, when Russia and Iran in the future may develop their production and pipeline capacity for their export of natural gas, no firm alternative exists to Turkmenistan but to sell its gas to said re-exporters at a price dictated by them. In a longer run Turkmenistan appears to be the looser of this deal as Turkmenistan is dependent on these two gas-rich countries [15]. 

Long-term contracts Right of first refusal... 

Both natural gas as well as gas transportation service have traditionally been traded under take or pay contracts. In the gas transportation industry, deregulation typically brings along a transition from bilateral long term contracting to transparency and non-discriminatory behavior. Transportation suppliers typically offer a menu of often short-term transportation contracts with different degrees of priority and flexibility. In some systems shippers may also bid for capacity rights. 

Several reasons may be cited for the domestic utility power industry s overall lack of interest in petroleum coke. One is the well established use of coal, which is purchased under long-term contracts with relatively level prices. By comparison, both the availability and price of coke are typically volatile from year to year. 

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