Pricing market

In most processes, the largest individual cost is raw materials. Raw materials costs and product prices tend to have the largest influence on the economic performance of the process. The value of raw materials and products depends on whether the materials in question are being bought and sold under a contractual arrangement (either within or outside the company) or on the open market (the spot price). Open-market prices can fluctuate considerably with time. Products are normally sold at below open-market price when under a contractual arrangement. 

Chlorine Capacity. In 1982 U.S. chlorine capacity reached a record high of 36,864 t/day (13.2 million tons per year) as shown in Eigure 1. After 1982, decreased chlorine demand lowered market prices and some producers discontinued production, so that capacity dropped to 31,888 t/day in 1987 (5). Expansion to meet demand led to an increased capacity in March of 1989 of 32,550 t/day (11.1 x 10 t/yr). 

Because of its excekent combination of properties, processibkity, and relatively low price compared to other fluoropolymers, PVDF has become the largest volume fluoropolymer after PTFE consumption in the United States has grown from zero in 1960 to about 6200 metric tons in 1991 (186). About 49% of the consumed volume is PVDF modified by copolymerization with 5—12-wt % HFP to enhance flexibkity. In 1992, Hst price for homopolymer powders was 15.32/kg, and for pekets 15.42/kg the reported market price was 14.09—14.22/kg (187). In the United States, almost ak PVDF is suppHed by Ausimont USA, Inc., Elf Atochem North America, Inc., and Solvay Polymers, Inc. Ausimont and Elf Atochem are producers Solvay is an importer of the resin. Smak amounts of resin are imported from Germany by Huls America, Inc, and from Japan by Kureha Chemical Industry Co., Ltd. PVDE producers and their trademarks are Hsted in Table 4. 

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. 

Economics. As with the alkyl tin stabilizers, the market pricing of the mixed metal stabilizers tend to be directed by the particular appHcation. The calcium—zinc and barium—cadmium packages are typically used at 2.0—4.0 parts per hundred of PVC resin (phr) in the formulation. These completely formulated products are sold for 2.50— 4.40/kg for the Hquid products and 3.20— 6.50/kg for the soHds and pastes. The higher efficiency products aimed at rigid appHcations tend toward the higher end of the cost range. 

The basic metal salts and soaps tend to be less cosdy than the alkyl tin stabilizers for example, in the United States, the market price in 1993 for calcium stearate was about 1.30— 1.60, zinc stearate was 1.70— 2.00, and barium stearate was 2.40— 2.80/kg. Not all of the coadditives are necessary in every PVC compound. Typically, commercial mixed metal stabilizers contain most of the necessary coadditives and usually an epoxy compound and a phosphite are the only additional products that may be added by the processor. The requited costabilizers, however, significantly add to the stabilization costs. Typical phosphites, used in most flexible PVC formulations, are sold for 4.00— 7.50/kg. Typical antioxidants are bisphenol A, selling at 2.00/kg Nnonylphenol at 1.25/kg and BHT at 3.50/kg, respectively. Pricing for ESO is about 2.00— 2.50/kg. Polyols, such as pentaerythritol, used with the barium—cadmium systems, sells at 2.00, whereas the derivative dipentaerythritol costs over three times as much. The P-diketones and specialized dihydropyridines, which are powerful costabilizers for calcium—zinc and barium—zinc systems, are very cosdy. These additives are 10.00 and 20.00/kg, respectively, contributing significantly to the overall stabilizer costs. Hydrotalcites are sold for about 5.00— 7.00/kg. 

In the fuel cell hydrogen is used two to three times as efficiendy as in an internal combustion engine. Hence, when utilized in a fuel cell, hydrogen can cost two to three times that of more conventional fossil fuels and stiU be competitively priced, ie, as of this writing the market price for hydrogen when used in a fuel cell and produced by electrolysis is competitively priced with gasoline. 

Indium prices vary by purity level according to the number of mines. For 99.97 or 99.99% pure indium Meta/Bu//etm magazine s free-market prices ranged from 160 to 190/kg in 1993. Prices have trended downward since 1988. This, coupled with the fact that consumption increased during this period, is evidence that supply is ahead of demand. The most notable production increases have occurred at Indium Corp. of America, Nippon Mining Co. Ltd., Cominco Ltd., and Metaleurop S.A. The largest increase was made by Indium Corp. A 30-t increase was announced in 1988 in 1993 Indium Corp. announced plans to increase production by another 30 t to be phased in with demand, bringing the company s actual and planned increases to 60 metric tons over the 1988 level. 

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 concentration of most metals in the earth s cmst is very low, and even for abundant elements such as aluminum and iron, extraction from common rock is not economically feasible. An ore is a metallic deposit from which the metal can be economically extracted. The amount of valuable metal in the ore is the tenor, or ore grade, usually given as the wt % of metal or oxide. Eor precious metals, the tenor is given in grams per metric ton or troy ounces per avoirdupois short ton (2000 pounds). The tenor and the type of metallic compounds are the main characteristics of an ore. The economic feasibihty of ore processing, however, depends also on the nature, location, and size of the deposit the availabihty and cost of a suitable extraction process and the market price of the metal. 

Historical hst prices for bulk quantities of selected methacrylates ate given in Table 7 (134). The historical price trends reflect the combined effects of improved manufacturing capabihty and the market price of cmde oil, the basic raw material to which these materials are ultimately tied. 

Table 5. Merchant Market Prices/ /t Nitric Acid, 100% Basis...

The market prices for PET molding resins in January 1996 in the United States were 2.90— 3.15/kg for 30% glass-filled PET, 3.26— 3.41/kg for 55% glass-filled, and 3.23— 3.45/kg for 30% glass-filled flame-retardant-grade PET (125). 

Market prices are extremely volatile and follow cycles of advance and decline related to fluctuations ia global iaventories and world economic forces. For example, for northern bleached softwood kraft, which is considered a global benchmark pulp grade, market price went from 840/t ia 1990 down to 440/t ia 1993 as a result of oversupply and worldwide recession (3). By 1995 virtually all of the price losses had been recovered. 

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). 

New silver accounts for only a portion of the silver used ia the United States. Recycled silver makes up the difference. AvailabiUty of recycled silver depends on market price. As the market price iacreases, so does the flow of recycled silver (see Recycling, nonferrous metals). The New York price reached an all-time high of 1543/kg ( 48.00/troy oz) onjanuary 21, 1980, primarily as a result of speculation. The price fell to 347.30/kg ( 10.80/troy oz) four months later as the pressure of speculative activity ia the silver market lessened. Comprehensive reviews of the silver market are published yearly the New York prices between 1985 and 1988 were as follows (23). 

The market price of USP sodium iodide generally follows the price of cmde iodine multiphed by a factor of 1.8—2. Higher purity grades are only marginally related to the price of cmde iodine. 

The production of steel is of great importance in most countries because modem civilization depends heavily on steel, the raw material for many industries. As a result, most countries have an active steel industry, which at one time was heavily subsidized but as of this writing is increasingly privatized. The world trade in steel was frequently a source of hard currency where the United States was the main contributor. Trade is much more at market prices that reflect the real cost of production. Under these conditions, the United States in its own market is very often the low cost producer following massive cost reduction in the 1980s. The United States can export a few million tons per year at a profit. 

The three single biggest producers were India, Brazil, and the United States, with 15.85, 12.6, and 7.24 x 10 kg, respectively. The average world market price for raw sucrose in 1994—1995 was 0.27/kg. A comparison of the price of sucrose and other sweeteners (qv) is given in Table 2. 

Micellar/polymer (MP) chemical enhanced oil recovery systems have demonstrated the greatest potential of all of the recovery systems under study (170) and equivalent oil recovery for mahogany and first-intent petroleum sulfonates has been shown (171). Many somewhat different sulfonate, ie, slug, formulations, slug sizes (pore volumes), and recovery design systems were employed. Most of these field tests were deemed technically successful, but uneconomical based on prevailing oil market prices (172,173). 

Agriculture is the largest industry for sulfur consumption. Historically, the production of phosphate fertilizers has driven the sulfur market. Phosphate fertilizers account for approximately 60% of the sulfur consumed globally. Thus, although sulfur is an important plant nutrient in itself, its greatest use in the fertilizer industry is as sulfuric acid, which is needed to break down the chemical and physical stmcture of phosphate rock to make the phosphate content more available to plant life. Other mineral acids, as well as high temperatures, also have the abiUty to achieve this result. Because of market price and availabiUty, sulfuric acid is the most economic method. About 90% of sulfur used in the fertilizer industry is for the production of phosphate fertilizers. Based on this technology, the phosphate fertilizer industry is expected to continue to depend on sulfur and sulfuric acid as a raw material. 

Sales of thiophene in the 1990s amount to hundreds of metric tons per year. SuppHes are available worldwide from Synthetic Chemicals Ltd. (SCL) in the United Kingdom and Elf-Atochem SA in France. There is currendy no U.S. producer of thiophene or the principal thiophene derivatives. At these levels of demand, material is shipped in 200-hter dmms and in bulk quantities. Market price is dependent on the level of off-take. 3-Methylthiophene is also available from SCL, but demand is low and even lower in the case of 2-methylthiophene lower production and lower market demand have led to higher prices for these derivatives. 

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

Primary cadmium prices rose sharply ia 1987—1988, from 3.60 to 15.50/kg ia 1—5 metric ton lots (13), largely as a result of speculative stockpiling and strong demand driven by rapid growth in the Ni—Cd storage battery market. Prices decreased just as sharply in 1990—1991 however, reaching 3.15/kg in late 1990, as a result of erosion of consumer stockpiles, regulatory pressures, and a slow-down in the Ni—Cd battery market (14,15). 

The pricing of carbon black feedstocks depends on their alternate market as residual fuel oil, especially that of high sulfur No. 6 fuel oil. The actual price is deterrnined by the supply/demand relationships for these two markets. Feedstock cost contributes about 60% of the total manufacturing cost. The market price of carbon black is strongly dependent on the feedstock cost as shown in Figure 8. 

Market prices for ch oline products in 1992 were as follows 70% ch oline chloride(FeedGrade), 0.77/kg choline dihydrogen citrate, 7.20/kg and choline hydrogen tartrate, 9.50/kg. 

Economic Aspects. The market prices for cinnamyl alcohol quoted in Table 5 have been adjusted to reflect an average price for the relative quantities of the different grades sold. As of this writing, DSM is the only significant suppHer for this material. 

From 1980 through 1987, the market price fluctuated between 395 and 595 per metric ton, ending up at 550 per ton in 1987 (1,10). Since the beginning of 1990, the U.S. contract price for bulk quantities of cumene has shown a general downward trend. A compilation of prices from then until the end of April 1992 shows prices starting the period at 520 per metric ton. For a brief period from late 1990 to early 1991, the price rose to levels around 550 per ton, but from then until April 1992, the price decreased to a steady value of 425 per ton (11). 

For years this was the process used to manufacture alizarin (19) although it was claimed that a more economical process would result if 2-chloroanthraquinone was used instead of silver salt (20). In 1870, the market price for 100% synthetic alizarin was 200 German marks, but by 1912 it had fallen to 5—6 marks, thereby sounding the death of natural alizarin (21). Also, dyers welcomed synthetic alizarin since it was 100% 1,2-dihydroxyanthraquinone natural alizarin always contained varying amounts of other polyhydroxyanthraquinones. 

A related problem is the allocation of costs when a raw material for one process operation is produced internally by another process operation of the same organization (17). The transfer or captive price assigned to the raw material can range from the production cost to a market price that reflects a total profit margin for the material producer, depending on the accounting procedures adopted. 

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. 

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