Economics of Metal Markets

Simple economic principles can provide useful insights into the behavior of metal markets. In applying these principles, however, the analyst must take into account technology, market structure, government policies, and other institutional factors influencing the nature of metal supply and demand. Knowledge of both economics and the metal markets is essential. One without the other is likely to lead to sterile or even misleading results. In support of the above conclusion, this study examines the nature of metal supply and demand in the immediate run (when output is fixed), in the short run (when capacity is fixed), in the long run (when technology and known deposits are fixed), and in the very long run (when nothing is fixed). The first section considers how a metal's own price, the prices of substitutes and complements, income, and other factors determine its demand. Metal demand functions, demand curves, and demand elasticities are investigated. The second section focuses on metal supply. It contrasts the nature of supply for metals mined as individual and main products, recovered as byproducts and coproducts, and recycled from old and new scrap. The third and final section applies the concepts introduced in the first two sections. It analyzes the causes and consequences of the instability that plagues metal markets, the impact of public stockpiling on metal markets, and the conditions needed to use the "incentive price" technique to forecast long run metal prices

Comparative Advantage in Mining

Substantial shifts in the geographic location of mining have taken place over the last three decades. These shifts, and the underlying factors causing them, are examined in this study of six important metallic commodities--bauxite, copper, iron, nickel, tin, and zinc. The widely held belief that the developed countries, due to the exhaustion of their own mineral resources, are becoming increasingly dependent on the developing countries for the important minerals needed by their advanced economies receives little support. It is true that the United States and other highly industrialized countries have seen their share of world mineral production fall. However, the growth of mining in Australia, Canada, and South Africa has largely offset this decline. This study also concludes that the factor endowment theory of international trade is of some use in analyzing resource production and trade. A positive and generally significant relationship is found between reserves and production, which suggests that a sizable portion of the inter-country variation in mining can be attributed to differences in mineral endowment. The theory, however, offers no insights into why mineral endowments change over time, causing substantial shifts in the comparative advantage of mining. This, along with other identified shortcomings, means the factor endowment theory provides at best an incomplete explanation of mineral trade and production

The Impact of Seabed Mining: A Qualitative Analysis

This paper considers the future effects of seabed mining on the cobalt, copper, manganese, and nickel industries, and the implications for producing and consuming states. The analysis is qualitative, or conceptual, in nature. While no effort is made to actually measure or quantify the impacts of seabed mining, important variables that one would have to consider in making such measurements are identified. While deep-sea mining holds the promise of potentially less expensive sources of minerals, it also raises the specter of dislocation and decline for land-based producers, many of whom are located in the developing countries. There is widespread concern that unless seabed mining is regulated, most of the benefits flowing from this "common heritage of mankind" will go to the developed countries that have both the technology to exploit these minerals and the capacity to consume the output. Despite the study's fairly narrow scope, two general conclusions emerge. First, measuring the future impacts of seabed mining is an extremely complicated and difficult endeavor. There is much disagreement about the relative costs of seabed and land-based production. How scientific breakthroughs and other technological developments will alter future costs is simply unknown, and to some extent unknowable. Moreover, relative costs alone will not be the only determinant of the future level of seabed mining. Some countries may support such production to lessen their dependence on foreign producers. Distressed land-based producers may receive assistance from their own governments and protection in the form of constraints on seabed production, negotiated through international agreements. Thus production may be influenced as much by political decisions as by economic considerations. Even if the future level of seabed mining could be ascertained, its impact would be difficult to assess ex ante. Such assessments require knowledge of long-run supply and demand curves that goes beyond observed historical price and output equilibria. Nor is it clear how these curves will shift over time in response to resource depletion, technological progress, the introduction of new materials, changes in mineral policies, and other factors. Second, the potential impacts of seabed mining appear to vary and to be less bounded than is often presumed. For example, the first commercial mining of seabed nodules is widely anticipated during the 1990s and several consortia are expected to be in operation by the end of the century. Yet the necessary technology, particularly on the scale required, has not yet been proven. Further, it is not clear whether the requisite policies to protect investments are in place. These uncertainties raise the possibility that seabed mining could suffer a fate similar to that of oil shale, where for years commercial production appeared imminent but the goal remains elusive. Moreover, the impacts of seabed mining are not fully appreciated as is evident by the argument that seabed mining could not force existing land-based mines to close. The rationale for this position overlooks the potential influence of new technology on relative costs of both seabed and land-based mining and ignores the coproduct nature of seabed operations and the substantial effect of even limited production on the cobalt market and perhaps on the manganese market

The Impact of Seabed Nodule Mining: A Qualitative Analysis

This paper considers the future effects of seabed mining on the cobalt, copper, manganese, and nickel industries, and the implications for producing and consuming states. Two general conclusions emerge. First, estimating the future impacts of seabed mining is an extremely complicated and difficult endeavor. There is much disagreement about the relative costs of seabed and land-based production. How scientific breakthroughs and other technological developments will alter future costs is simply unknown, and to some extent unknowable. Moreover, relative costs alone will not be the only determinant of the future level of seabed mining. Some countries may support such production to lessen their dependence on foreign producers. Thus production may be influenced as much by political decision as by economic considerations. Even if the future level of seabed mining could be ascertained, its impact would be difficult to assess ex ante. Such assessments require knowledge of long-term supply and demand curves, and it is not clear how these curves will shift over time in response to resource depletion, technological progress, the introduction of new materials, changes in mineral policies, and other factors. Second, the potential impacts of seabed mining appear to vary more and to be less bounded than is often presumed. The necessary technology, particularly on the scale required, has not yet been proven, and, it is not clear whether the requisite policies to protect investments are in place. These uncertainties raise the possibility that seabed mining could face a fate similar to that of oil shale, where for many years commercial production appeared imminent, but the goal remains elusive. Moreover, the impacts of seabed mining are not fully appreciated as is evident by the argument that seabed mining could not force existing land-based mines to close. The rationale for this position overlooks the potential influence of new technology on relative costs of both seabed and land-based mining and ignores the coproduct nature of seabed operations and the substantial effect of even limited production on the cobalt market and perhaps the manganese market

Material Substitution: Lessons from the Tin-Using Industry

The substitution of relatively abundant and cheap raw materials for scarce and expensive resources has since the Industrial Revolution helped the world satisfy its voracious appetite for material inputs and cope with the problem of resource deletion. Despite its importance, however, there is still much we need to learn about the substitution process. To what extent, for example, is substitution intertwined with technological change? How important are material prices in simulating substitution? How quickly can substitution normally take place? How does it affect our ability to forecast mineral consumption; to apply conventional economic principles in analyzing mineral markets; to constrain monopoly or oligopoly power in these markets; to alleviate mineral shortages? This report is a reprint of the first part of a study undertaken in the hope of providing some insights into such questions. It provides an overview or summary

Nonfuel Minerals - The Fear of Shortages and the Search for Policies

As one of the largest producers and consumers of nonfuel minerals, the United States greatly influences mineral markets and trade worldwide. Historically, the country has followed a policy of relatively free trade in mineral commodities, encouraging consumers to search abroad for low-cost supplies, and producers to sell wherever the price is highest. Of course, there are exceptions, but overall public policy favors trade, allowing huge quantities of minerals to flow across the country's borders. In recent years, particularly as worldwide recession and depressed commodity markets have battered domestic mineral producers, a growing number of voices have called for a change in this policy, for more protection and greater domestic self sufficiency. Should such a change occur on a significant scale, it would have obvious, and serious, implications for every major mineral producing and consuming country. Even the modest movements toward protection over the last few years clearly demonstrate the potential of such a change to disrupt the existing economic and political relations among nations

New radiometric evidence for the age and thermal history of the metamorphic rocks of the Ruby and Nixon Fork Terranes, West-Central Alaska

https://deepblue.lib.umich.edu/bitstream/2027.42/155805/1/Dillon_et_al_1985_New_radiometric.pd

Post-Weaning Exogenous Gonadotropins Treatment for improved Swine Reproduction

The objective of the experiment in this article was to determine the effect of various gonadotropin combinations administered one day postweaning on subsequent reproductive performance in postweaning sows. The results of this study regarding the usage of gonadotropin combinations is a tool that must be implemented with good management practices. It will decrease the weaning to estrus interval and increase the number of piglets born alive