Supply and demand

Until 1977, one can state that supply and demand dictated the price of tungsten. However, from then on the price control mechanism was no longer effective. Although annual tungsten consumption within the period from 1977 to 1989 increased fiirflier from 40,0001 W to 52,0001 W, the price fell continuously. Several circumstances were responsible for the new situation. 

The aforementioned change of raw material supply, from ore concentrates to APT, etc., starting in 1987, did not improve the price situation, but had a dangerous impact on MEC converters, as well as APT and ferrotungsten plants. Some of them were forced to close. 

The collapse of the communist world together with the sudden fall in worldwide tungsten consumption lead to the historical minimum of the price of tungsten in 1993. Since then, there has been a slight recovery to levels like in the period between 1986-1992. 

any future prediction seems as worthless as the general opinion expressed at the 2nd International Tungsten Symposium, held in 1982 at San Francisco, that the LMB quotation will not fall below 100 US /MTU. 

As it can be seen in Table 13.1, that supply/demand statistics are worldwide more or less balanced. Primary tungsten supply to the MEC is illustrated in Fig. 13.7 (by suppliers). The share of China increased while die supply from the MEC decreased. The 1994 imports from CIS were additional. However, what is not at all obvious is the origin of the supply, either from stocks or from mine production. Therefore, another statistic (comparison of mine production and demand) shows a much less balanced situation (Fig. 13.8). The following short historical consideration should explain the situation between 1981 and 1996. 

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Supply and demand statistics for 1988 for all regions of the wodd as compiled by SRI International are given in Table 5. The wodd producers of acetal resins and their aimual capacities are Hsted in Table 6 (29). Hoechst Celanese and Ultraform Corporation (a joint venture of Degussa and BASF) have aimounced capacity expansions in the United States to 77,000 t and 16,000 t, respectively both were due in place in 1990. Part of general capacity expansion plans, aimounced by Du Pont for completion in 1991, are beHeved to apply to acetal resins. 

The economics of acetone production and its consequent market position are unusual. Traditional laws of supply and demand cannot be appHed because supply depends on the production of phenol and demand is controUed by the uses of acetone. Therefore, coproduct acetone from the cumene to phenol process will continue to dominate market supply. DeHberate production of acetone from isopropyl alcohol accommodates demand in excess of that suppHed by the phenol process. More than 75% of world and 90% of U.S. production comes from the cumene to phenol process. 

Olefin Feedstock Selection. The selection of feedstock and severity of the cracking process are economic choices, given that the specific plant has flexibiUty to accommodate alternative feedstocks. The feedstock prices are driven primarily by energy markets and secondarily by supply and demand conditions ia the olefins feedstock markets. The prices of iadividual feedstocks vary widely from time to time as shown ia Figure 2, which presents quarterly prices of the various feedstocks ia the United States from 1978 through 1991 ia dollars per metric ton (1000 kg) (4). 

Benzene, toluene, and a mixed xylene stream are subsequently recovered by extractive distillation using a solvent. Recovery ofA-xylene from a mixed xylene stream requires a further process step of either crystallization and filtration or adsorption on molecular sieves. o-Xylene can be recovered from the raffinate by fractionation. In A" xylene production it is common to isomerize the / -xylene in order to maximize the production of A xylene and o-xylene. Additional benzene is commonly produced by the hydrodealkylation of toluene to benzene to balance supply and demand. Less common is the hydrodealkylation of xylenes to produce benzene and the disproportionation of toluene to produce xylenes and benzene. 

The Clean Air Act Amendments of 1990 limit the amount of benzene in gasoline in the United States to 1% (7). Initially there was some concern that this would dismpt the benzene supply and demand balance in the chemical industry because at that time gasoline contained benzene above 1%. If refiners had to extract all of the benzene above 1%, substantial additional benzene would be produced. However, only modest increases in the quantity of benzene produced from reformer sources is expected as most refiners can adjust the composition of reformer feed and reformer severity to produce less benzene. 

PET is based on petroleum and the price of polyester fiber fluctuates with the price of -xylene and ethylene raw materials as well as with the energy costs for production. With the abiUty to interchange with other fibers, especially cotton iu cotton blends, the price of polyester is affected by the price and avadabihty of cotton as well as the supply and demand of polyester. 

Economic Market. The spice trade is controlled by many direct elements and responds slowly to supply and demand fluctuations. Resupply depends on growth to plant maturity, which for certain items, such as black pepper or nutmeg, can be several years. The raw material is directly affected by climate, adverse weather conditions, and control of plant diseases and insect and animal pests. Limited agricultural scientific advances are appHed to the cultivation of the botanicals, and there are many grades of product and degrees of quahty caused by different growing or processing conditions, sometimes by unknown factors as well. 

T. J. Woods, The Eong-Term Trends in U.S. Gas Supply and Prices 1992 Edition of the GRJ Faseline Projection of U.S. Energy Supply and Demand to 2010,... 

Very Htde data are readily available on China s supply and demand situation. It is known, however, that they rely almost entirely on calcium carbidey for acetylene production and that there are numerous low capacity plants, a situation that is probably not too different from that of Japan. 

Over 90% of the HCl produced ia the United States origiaates as a coproduct from various chlorination processes direct generation of HCl from and CI2 accounts for only about 8% of the total production. Table 11 describes the production contribution of HCl from significant sources through the period 1980 to 1992 (72). Figure 6 illustrates the historical production growth of HCl ia the United States (73). The growth rate, about 5—6% from 1955 to 1975, slowed to - 1% because of disparity between supply and demand (see Table 12). The production capacity ia 1993 was about 2.92 million metric tons, down 9.6% from the 1992 production of 3.24 million metric tons (74). 

It shows concisely the existing vendor capacities for the raw material, planned expansions or new producers, demands for other uses, and demand within the analyst s company. In some cases, the report includes a wodd supply and demand balance. A key objective of a purchase profile report is to make the buyer as well informed as the marketing manager of the seller. If this is achieved, the buyer can often secure a beneficial purchase contract. 

Table 4. Supply and Demand of Oxalic Acid in tbe World Market in 1992, tons...

Polyamide and Intermediates, Techcon (U.K.) Ltd., London pubHshed monthly Nylon Intermediates andFiber, PCI— Fibers Raw Materials, West Sussex, U.K. pubHshed monthly World Nylon 6 and 66 Supply and Demand Report, PCI— Fibers Raw Materials, West Sussex, U.K. pubHshed annually Chemical Economic Handbook, Stanford Research Institute, Menlo Park, Calif., pubHshed and updated periodically. 

The roster of PPS suppHers in Japan is much larger than in the United States. Multiple market presences in Japan include TOPPS (Toray PPS, formerly TO—PP, which was a joint venture between Toray and Phillips) Dainippon Ink and Chemicals, Inc. Tosoh Tohpren Kureha/Polyplastics and Idemitsu. PPS marketed by Toray is sold under the Torelina trademark. Production capacity in Japan was estimated in 1995 at 11,400 t of neat resin per year. At the time that this capacity was created, the situation in Japan was characterized by overcapacity and underutilization. Additionally, further PPS capacity was brought on by Sunkyong in Korea, which is marketing a low cost PPS product. Although excess PPS capacity still exists in Japan, market growth has narrowed the gap between supply and demand. 

Aniline prices in the past have been sensitive to the balance between supply and demand in the industry and this trend is likely to continue in the next decade. List prices in the early 1980s began at 0.97/kg, but declined to a low of 0.64/kg as a result of industry overcapacity. By the end of 1987, prices had reached 1.30/kg, and the price has remained firm due to strong demand for aniline. 

Table 12. World Ammonia Supply and Demand, 10 t of Elemental Nitrogen...

Whereas the manufacturing cost is strongly influenced by energy prices, cost of money, and capital investment, ammonia selling prices are usually deterrnined by supply and demand. Therefore, the profitabiUty of ammonia plants is deterrnined by the margin between cost of production and ammonia price. 

The supply and demand for mbidium compounds has grown steadily since the 1970s. In 1979 the U.S. demand was ca 1040 kg of contained mbidium (16), and total world demand was estimated at approximately twice that of the United States. Reserves of mbidium in North America are estimated at 2 X 10 kg the United States is - 100% import-reliant for mbidium, and Canada is the principal source of the raw material (16). The demand for mbidium metal is small compared to the demand for mbidium compounds. Table 2 fists approximate prices of mbidium metal and mbidium compounds. Primary producers of mbidium are Cabot Performance Chemicals (Boyerstown, Pennsylvania), MSA Research Corporation (Callery, Pennsylvania), and CM Chemical Products, Inc. (Berkeley Heights, New Jersey). Research quantities of mbidium in standard and specialized ampuls are available from Strem Chemicals, Inc. (Newburyport, Massachusetts). 

Ferrosilicon Supply and Demand. Western world production of ferrosihcon amounted to 1,120,000 metric tons of contained sihcon in 1993, the equivalent of 1,500,000 t of 75% ferrosihcon. The Western world production has fahen by almost one-fourth since the all-time peak recorded in 1989. The main reason for this drop has been the rise in ferrosihcon exports from China, Eastern Europe, and other CIS countries. 

Fats and oils are treated as commodities in the open market and are purchased in bulk. As commodities, their prices fluctuate with supply and demand. Furthermore, fats and oils come in different grades that reflect different levels of processing and have industry-standardized specifications such as the American Fats and Oil Association. In the manufacture of soap in the United States, the source of animal fats is domestic whereas the vegetable oils are frequently obtained from Southeast Asia, primarily Malaysia and the Philippines. 

The commodity nature of the product and the easy access to the Hcensed processes enable new producers, particularly in developing countries, to enter the global styrene merchant market with Htde experience in styrene technology. Access to ethylene, which caimot be easily transported by means other than pipelines, is a key factor in considering new styrene faciHties. Timing, or luck, is even more important because the supply and demand of styrene are seldom in balance and the price fluctuates broadly and rapidly as a result. Most of the time, the producers either suffer losses (1981—1985, 1991—1993) or enjoy handsome profits (1987—1990, 1994—mid-1995). Investments in styrene plants are known to have been recovered in less than a year, but prosperity encourages over-investment and lean years may foUow. 

The World Tin Industy—Supply and Demand, Austrahan Mineral Economics Pty., Ltd., Sydney, Austraha, 1980, pp. 176—180, 202—206. 

Table 9 is a summary of world toluene supply and demand for 1996. North America, Asia, and Western Europe dominated the world s toluene business ia 1996. The three regions together accounted for over 85% of world production, imports, exports, and actual consumption, respectively. North America led ia production and consumption, while Asia led ia imports and exports. Table 10 presents the world toluene supply and demand. The worldwide demand for toluene increased by 7% from 1993 to 1994 and from 1994 to 1995, consecutively, because of higher hydrodealkylation (HDA) and disproportionation (TDP) operations, plus strong demand for all other derivatives. Over 70% of toluene is derived from a single source, catalytic reformate. 

Table 9. World Toluene Supply and Demand Summary for 1996,10 t...

Table 11. Toluene Supply and Demand, North America. , lO t ...

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