The Metals

Tilton, John E. ; Vogely, William A.
Organization: Society for Mining, Metallurgy & Exploration
Pages: 33
Publication Date: Jan 1, 1985
INTRODUCTION Mineral commodities are normally separated into three generic classes-metals, nonmetals, and energy minerals including oil and gas as well as the solid fuels. Metals, the focus of this chapter, encompass a large number of different substances. The U.S. Bureau of Mines, for in- stance, has commodity specialists following trends in over 40 metal products of importance to the country's economy and well being. Ranging from aluminum to zirconium, the metals display an incredible degree of diversity. Some such as lead are heavy, others such as magnesium are light. Some such as copper are good conductors of electricity. Others such as silicon are semiconductors. Mercury is found in liquid form, while some metals melt only when heated to extremely high temperatures. Iron and steel, aluminum, and copper are consumed in particularly large tonnages in a multitude of end uses, while many minor metals are needed in only small amounts in a few highly specialized applications. The use of some metals can be traced back into history for millennia, indeed back to the bronze and iron ages, while the commercial consumption of aluminum and other newer metals is less than a hundred years old. Some metals are extracted from large open pits, others are dug out of deep underground mines, and still others are processed from the sea. Mining and processing can be relatively uncomplicated and inexpensive, though in most instances highly sophisticated technology is necessary and the costs are high. Some metals are produced mainly as byproducts of other metals. Some are recovered in large quantities from the scrap of obsolete equipment and demolished buildings. Some are mined in only a few locations and traded worldwide, others are produced in many different countries. Some are sold by numerous firms at fluctuating prices determined on competitive commodity exchanges, others are produced by only a handful of firms and sold at stable producer-prices. This diversity makes the metals interesting, indeed fascinating, to study. Yet, it also poses problems, for each metal in its own way is unique. There is no general model or economic analysis applicable to all metals. Rather each must be considered individually, so that the analysis or model takes explicit account of its particular features. This means that a single chapter cannot begin to cover comprehensively the economics of all metals, and no attempt to do so is made here. Instead, we will concentrate on illustrating the usefulness of relatively simple economic principles, particularly those associated with supply and demand analysis, in understanding the behavior of metal markets. The next section begins by exploring the nature of metal demand. It is followed by an investigation of metal supply- from individual product production, from by- product and coproduct production, and from secondary production. The final section then illustrates the usefulness of the concepts introduced in earlier sections by using them to analyze
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