Thursday, September 19, 2013

Chemical and Material Shortage Alerts – September 2013

The purpose of this blog is to identify recent chemical and material shortages reported on the internet.

Coal.  Shortages of coal exist in India and Pakistan.  India is significantly increasing the amount of coal imported.  Primary suppliers of coal to India are Indonesia, Australia, and South Africa.  Although India has a fairly large amount of coal in the ground, quantities mined are not keeping up with demand.

Copper Scrap.   Scrap copper metal shortages are being experienced in China and in Europe.  This is leading to a decline of refined copper production.  One reason for the shortages is less construction is being demolished globally, and therefore less copper scrap.  Also, China is more restrictive on what copper scrap can be imported, due to increased environmental standards.

Helium.  Helium global shortages continue to be reported on the internet.  The primary problem seems to be that the US Government has been selling helium reserves at below market prices, so companies are reluctant to maintain and expand helium production.  Most helium production and inventory is currently in the United States.   The US Congress has recently directed a change in the US Government’s selling helium at below market prices, but this will take some time, e.g. a year or more, to correct the supply-demand in-balance.  

Iron Ore.   India’s steel mills continue to not have enough iron ore supplies available to meet their needs.  The supply problem apparently is caused, at least partially, by Indian-government bans, for environmental reasons, on iron ore mining in some regions.

Hydrochloric Acid.  Pakistan has been experiencing a shortage of hydrochloric acid, affecting certain manufacturing sectors.  The cause seems to be a ban on hydrochloric acid production imposed by the Pakistani government.

Natural Rubber. A global shortage of natural rubber supplies globally is increasing the use of synthetic rubber.  The shortage of natural rubber is primarily due to harvesters in Southeast Asia not being able to keep up with the demand.

Palladium.  Due primarily to increases in automobile production, especially in emerging markets, global demand for palladium is exceeding the supply in 2013.

Propylene.  Due to a higher reliance on natural gas as a petrochemical feedstock in the United States, due to the shale gas bonanza, less propylene is being produced from petroleum.  This is creating a propylene supply deficiency.

Tetracycline.  Tetracycline continues to be in short supply in the US market (since 2011).  A problem seems to be shortages in active ingredients that are used in producing tetracycline, a shortage due to economic reasons.

Tin.   The global supply of tin should continue to be tight due to Indonesian government restraints that applied to tin exports.  Indonesian production capacity of tin accounts for about 40% of world production capacity.   Demand has exceeded supply for several years causing tin prices to triple since 2005.  The primary use of tin is in soldering needed in electronic devices.

Urea.   India has a shortage of indigenously-produced urea.  One reason is that the price of imported urea is much less than the cost for Indian manufacturers to produce urea.  Pakistan also must import urea to meet the country’s needs.

This blog provides the locations and other limited information on 11 chemicals and materials recently reported on the internet as being in short supply.

Reasons for the shortages can be broadly categorized as: 

1.  Mining not keeping up with demand: coal, palladium;
2.  Production not keeping up with demand: natural rubber, propylene, urea;
3.  Government regulations: helium, hydrochloric acid, iron ore, tin;
4.  Sources no longer available: copper scrap, tetracycline.

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