Is there a common metals demand curve?

Previous studies have identified a single, stable and strong correlation between the price of metals and their consumption, such that low priced metals are always used in large amounts and visa versa. Some have interpreted this as evidence that metals share a common demand curve so that a single price elasticity of demand exists. This paper reviews and tests this hypothesis against a number of other possible explanations, including the idea that the relationship is an empirical curiosity. Modifications to the demand curve were tested by allowing metals to have different intercepts and price elasticities. The results from this analysis suggest that metals do not share a common demand curve and that the correlation identified between the price of metals and their level of consumption is an empirical curiosity. As such, the singular price elasticities published in past papers should not be used for assessing future rates of metals substitution.     

The role of co-products in stabilizing the metal mining industry

The objective of this paper is to test the hypothesis that cyclical metal mining activity is more stable when multi-metal products are produced. A theoretical short-run supply curve for a metal is developed showing by-product, co-product, and main product behaviour. This curve is used to illustrate co-product pricing trends that are indicative of different cyclical behaviour patterns. The non-parametrical sign test is used to test co-product price trends for the US metal mining industry. The results indicate that multi-metal production stabilizes the mining industry in the short run but not in the long run.     

World demand for cobalt: An econometric study

This article analyses the world demand for cobalt. It estimates short- and long-run elasticities with respect to price, activity and in some cases with respect to substitute-complement variables. For the USA these estimates have been obtained for all the important end-use categories. Aggregate elasticities are estimated for Japan, West Germany, France and for the non-communist world (excluding the USA). The appendix to the paper models price setting in the cobalt market and presents two simple simulations conducted on the world cobalt market.     

An economic model of the US aluminium market

An economic model of the US aluminium industry is constructed and estimated with annual data over the period 1960–1978. The authors' analysis shows that both the short- and long-term price elasticities of demand are relatively low, and that demand is highly dependent on aluminium end-use activity. A forecasting exercise is also undertaken, and the errors of forecast calculated.     

The economics of bauxite and aluminium: Distributed lags and new econometric estimates

Bauxite supply and demand equations for the largest producers and consumers are estimated with 1958–1982 data. In specifications that include industrial activity indexes, substitute prices and energy costs, these regressors improve the fits and are statistically significant. The own price variable, the Koyck-Nerlove lagged dependent variable, or both, become insignificant, or their estimated coefficients are substantially altered, in relation to their values in price-only models, which overestimate the own price impact and the gap between long- and short-term effects. Industrial activity is the main determinant, followed by the other new regressors. The Jamaican response to price is perverse and significant.     

Factor demand flexibility in the primary aluminium industry: Evidence from stagnating and expanding regions

The purpose of the paper is to analyse and compare short-run factor demand responses to price changes in the primary aluminium industry in Western Europe and the Africa-Middle East (AME) region. We outline a Translog variable cost function model, which is estimated employing a panel data set at the individual smelter level over the time period 1990-2003. The empirical results show evidence of limited - but far from insignificant - price-induced factor demand responses in the short-run. Overall aluminium smelters in the AME-region show evidence of higher estimated short-run own- and cross-price elasticities than their competitors in Western Europe, at least when it comes to labour and electricity demand. One important reason for this result is the greater number of pot lines with slightly different technologies at each smelter as well as the more intense use of the Prebake technology in the AME-region making retrofits in existing plants less costly than in Western Europe. The results also suggest that in both regions the demand for electricity has over time become less sensitive to short-run price changes, while the labour and material demand responses to price changes have increased but only in the AME-region. The liberalisation of the Western European electricity markets in combination with the rigid labour markets in this part of the world suggest that the shift in production capacity from the western world to the AME-region as well as China may continue.     

INDUSTRIAL WATER DEMAND WITH WATER REUSE1

ABSTRACT: This work establishes an industrial water demand (IWD) model for a short term estimate, which considers water reuse technologies and discharge regulations, for the integrated circuit (IC) industry in northern Taiwan. Based on the optimization of an industrial water cost system, a computerized system dynamics model (SD model) is developed to generate individual firm IWD using data from year 2000. A market IWD is further constructed for 25 1C firms in the study area and is approximated by an inverse logistic curve. Analytical results demonstrate that price elasticity varies with water price in cases involving water reuse.     

An Assessment of Future Energy Demand in Developing Countries

The statistical data show that the rapid growth in oil and energy demand in less-developed countries (LDCs) can be attributed to the rapid growth in gross domestic products (GDP) and the relatively high energy intensity in LDCs. The statistical analysis confirms that the GDP elasticities of aggregate energy and oil demand are high and the energy price elasticities are relatively low for the 15 LDCs studied. The projection shows that the future oil and aggregate energy demands are likely to increase at fairly rapid rates in LDCs. Furthermore, there are reasons to believe that these high growth rates may be sustained.     

Mineral commodity stabilisation: The producers' view

The author compares the relative merits of production cuts and buffer stocks as measures for market stabilisation in mineral commodity markets. He concludes that, although under certain conditions producers may gain by building up buffer stocks at times of relatively low demand, the low global price elasticities in most minerals markets make it likely that producers' interests would usually be better served by production cuts when demand falls.     

WATER PRICE RESPONSIVENESS OF COMMERCIAL ESTABLISHMENTS1

ABSTRACT: Pricing policy in water allocation has become of more concern as some areas find water is indeed a scarce resource. Demand estimates, where the quantity purchased-value in use relationships are of concern, have been made in other studies for residential, industrial, and agricultural uses in many areas of the country. The price-quantity relations for water use in commercial firms are estimated and discussed for several different types of stores in this study. A derived demand model is used to estimate commercial demand in the Miami, Florida, area. The price elasticity was generally low (inelastic) for all groups studied except for department stores. This group was found to have an elastic demand for water at all prices above $0.93 per thousand gallons purchased per month, where the mean price for this part of the sample was $1.24. The major implication of the study is that commercial establishments may be responsive to price changes over the long run, much as has already been shown for other types of user groups in other studies.     

CAN SCRAP SAVE US FROM DEPLETION?

Old scrap constitutes varied proportions of consumption of different metals. The authors construct a model in which the share of scrap in total supply is explained by three factors, the growth rate in overall demand for the metal; the share of metal contained in scrapped products actually recovered; and the durability of metal containing products. The model is used to study the impact on the share of scrap in total supply from changes in each of the factors. The strongest impact appears to follow from changes in the growth rate of overall demand. Inserting empirical data for copper into their model, the authors suggest, for instance, that in the long run old scrap could satisfy 100 per cent of copper demand, provided that this demand contracted by 1 per cent per year. La ferraille constitue des proportions variées d'utilisation de différents métaux. Les auteurs de cet article ont construit un modèle dans lequel la part de ferraille dans 'approvisionnement total est expliquée par le jeu de trois facteurs: le taux de croissance de la demande globale pour le métal, la part de métal contenue dans des débris de métaux effectivement récupérés et la durabilité des métaux renfermant des produits. Le modèle est utilisé pour étudier les incidences des changements dans chacun des facteurs sur la part de ferraille dans 'offre totale. L'incidence la plus importante semble provenir de modifications dans le taux de croissance de la demande globale. En introduisant des données empiriques pour le cuivre dans leur modèle, les auteurs suggèrent par exemple, qu' à longue échéance, la ferraille pourrait répondre à la demande totale en cuivre pourvu que cette demande se réduise d'un pour cent par année. El uso de chatarra representa una proporción variable del consumo de los diferentes metales. En este artículo los autores presentan un modelo en el que la proción de la chatarra en la oferta de un metal depende de tres factores: la tasa de crecimiento de la demanda global del metal, la proción del metal contenido en la chatarra recuperada, y la durabilidad o vida económica de los productos que contienen el metal en cuestión. El modelo se utiliza para estudiar el impacto sobre la proporción de chatarra en la oferta total causado por las variaciónes de cada uno de estos factores. El mayor impacto parece ocurrir debido al cambio en la tasa de crecimiento de la demands global. Al utilizar el modelo con datos para el cobre, los autores sugieren, por ejemplo, que en el largo plazo la chatarra de cobre podría satisfacer el cien por ciento de la demanda de este metal siempre que dicha demanda se contraigo en uno por ciento por año.     

Application of a hurdle negative binomial count data model to demand for bass fishing in the southeastern United States

This paper identifies factors that influence the demand for a bass fishing trip taken in the southeastern United States using a hurdle negative binomial count data model. The probability of fishing for a bass is estimated in the first stage and the fishing trip frequency is estimated in the second stage for individuals reporting bass fishing trips in the Southeast. The applied approach allows the decomposition of the effects of factors responsible for the decision to take a trip and the trip number. Calculated partial and total elasticities indicate a highly inelastic demand for the number of fishing trips as trip costs increase. However, the demand can be expected to increase if anglers experience a success measured by the number of caught fish or their size. Benefit estimates based on alternative estimation methods differ substantially, suggesting the need for testing each modeling approach applied in empirical studies.     

What caused the slack demand for metals after 1974?

This paper explores the general reasons for the sudden decline in the growth of world metal demand which began after 1974 and continues to impact the metal industries. For all of the eight metals studied, except aluminium, the dominant cause of this atrophy in demand is the stagnation in total world economic growth, which has caused reduced demand for all goods and services. In addition, consumer preferences have shifted away from metal-intensive goods, further reducing the need for metals. However, materials substitutions and manufacturing technologies have continued to evolve towards lower use of metal in each product at much the same rate after 1974 as before. Therefore, these aspects do not explain the sudden shortfall after 1974 except in the case of aluminium which experienced a dramatic change during the energy crisis years.     

Using Count Data and Ordered Models in National Forest Recreation Demand Analysis

This research addresses the need to improve our knowledge on the demand for national forests for recreation and offers an in-depth data analysis supported by the complementary use of count data and ordered models. From a policy-making perspective, while count data models enable the estimation of monetary welfare measures, ordered models allow for the wider use of the database and provide a more flexible analysis of data. The main purpose of this article is to analyse the individual forest recreation demand and to derive a measure of its current use value. To allow a more complete analysis of the forest recreation demand structure the econometric approach supplements the use of count data models with ordered category models using data obtained by means of an on-site survey in the Bussaco National Forest (Portugal). Overall, both models reveal that travel cost and substitute prices are important explanatory variables, visits are a normal good and demographic variables seem to have no influence on demand. In particular, estimated price and income elasticities of demand are quite low. Accordingly, it is possible to argue that travel cost (price) in isolation may be expected to have a low impact on visitation levels.     

Decontamination of water polluted by heavy metals with Taro (Colocasia esculenta) cultured in a hydroponic NFT system

The toxicity and bioaccumulation of two heavy metals—lead (Pb) and cadmium (Cd)—in a semi-aquatic plant, Colocasia esculenta (L. Schott), from a synthetic heavy metal solution were studied. Young plants of equal size were grown hydroponically in shallow raceways containing Hoagland medium amended with 20, 40, and 60 mg l^?1 of Pb and 2, 4, and 6 mg l^?1 of Cd. The medium containing heavy metals was allowed to flow through the raceways with a change in influent heavy metal solution on every 5th day. The experiment was continued for 20 days. A set of control raceways—one comprised of nutrient medium with heavy metal supplements, devoid of plants, and another with the plants and nutrient medium having no metal supplement—was also simultaneously run. Chlorosis in the leaves was the prominent toxicity symptom observed due to Pb and Cd on the test plants. A significant decrease in the relative growth, biomass productivity, and total chlorophyll content were noticed in the plants with an increase in concentration of metal supplement in the solution and exposure time. Both metals accumulated to higher concentrations in the roots than in shoots, suggesting that the metals were bound to the root cells and their translocation to the leaves was limited. The results of the 20-day-long experiments indicate that from a phytoremediation perspective, C. esculenta is a promising plant species for remediation of wastewater polluted with lower concentrations of Pb and Cd.     

Long-term adequacy of metal resources

Although the earth's crust contains vast quantities of metals, extraction technologies and associated costs are inextricably bound to three fundamental geological factors — the amount of metal available in the earth's crust in each range of grades, the mineralogical form and chemical state of the metal, and the spatial distribution of the metal. The energy required to recover a given amount of metal increases substantially as grade declines. Most metal is produced from sulphide or oxide minerals, whereas most metal in the crust may be locked in the structures of the more refractory silicates. Recovery from silicate minerals could require orders of magnitude more energy than that used at present as also could exploitation of small, widely scattered or thin, deeply buried deposits. Although specific information on the fundamental factors is not available, each factor must in turn tend to further restrict exploitation. Independence of average grade and tonnage for many deposit types further reduces the availability of rock as a source of metal. In the long term, effects of these factors will be large increases in price for many metals.     

Road transport fuel demand in the LDCs

Over the last decades, oil consumption in the developing countries hus been increasing rapidly. Road transport has accounted for most of this increase in demand. It is the thesis of this paper that future growth in oil demand in developing countries will occur mainly in the road transport sector and that this growth will be surprisingly strong. Estimated income and price elasticities for several developing countries are presented and forecasts for oil consumption in road transport in the developing countries up to 2010 are given.     

Residential Demand for Water in the Chicago Metropolitan Area1

Mieno, Taro and John B. Braden, 2011. Residential Demand for Water in the Chicago Metropolitan Area. Journal of the American Water Resources Association (JAWRA) 47(4):713‐723. DOI: 10.1111/j.1752‐1688.2011.00536.x Abstract: This paper provides the first contemporary analysis of residential water demand in humid Northeastern Illinois, in the vicinity of Chicago, and explores seasonal and income‐based differentials in the responsiveness of water use to water prices. Using a panel of system‐level data for eight water systems and controlling for seasons, weather, incomes, and community characteristics, the analysis yields low estimates of price elasticity of demand for water in line with other studies. Furthermore, price response is greater in summer and less in higher income communities. We suggest that use of seasonal pricing can help mitigate equity issues arising from differential income elasticities while taking advantage of the greater price responsiveness of summertime water use.     

The macroeconomic determinants of volatility in precious metals markets

This paper models the monthly price volatilities of four precious metals (gold, silver, platinum and palladium prices) and investigates the macroeconomic determinants (business cycle, monetary environment and financial market sentiment) of these volatilities. Gold volatility is shown to be explained by monetary variables, but this is not true for silver. Overall, there is limited evidence that the same macroeconomic factors jointly influence the volatility processes of the four precious metal price series, although there is evidence of volatility feedback between the precious metals. These results are consistent with the view that precious metals are too distinct to be considered a single asset class, or represented by a single index. This finding is of importance for portfolio managers and investors.     

An econometric model of the international bauxite-aluminium economy

This simultaneous equation model emphasizes oligopolistic and vertical integration features, and conflict between companies and some bauxite producer country governments. Estimates do not support Koyck lags, or big gaps between long- and short-term elasticities. Strongest influence is industrial activity in advanced countries. Price and substitution elasticities are low. With an 11 year horizon, cartelization gains are high. In the longer term, Australia's participation in, or exclusion from the cartel, and cartelization gains, are strictly interdependent, and dependent on Australia following policies as a bauxite producer, or, more realistically, as an aluminum producer (which makes cartel perspectives poor).