European Union Graphite Production and Availability (2004-2014)

The British Geological Survey’s “World Materials Statistics Database” was used to produce the graph and table shown below. (Click here) to go to the website where this data is available.)

table	production (mined) metric tons	imports metric tons	exports metric tons	available metric tons
2004	8,550	149,924	63,693	94,781
2005	6,124	159,227	44,563	120,788
2006	5,000	135,241	45,481	94,760
2007	3,000	170,026	99,472	73,554
2008	3,250	227,526	52,251	178,525
2009	28,102	94,321	37,826	84,597
2010	7,053	173,097	47,551	132,599
2011	925	162,640	52,950	110,615
2012	328	115,861	43,618	72,571
2013	769	115,421	36,035	80,155
2014	1,017	136,970	39,805	98,182
average	5,829	149,114	51,204	103,739

The data shown is for natural graphite – synthetic graphite data is not included.   The graphite available data represents the total graphite that was produced (mined) in all countries of the European Union plus the graphite imported into those countries less graphite exported from the countries.

The data   shows how depended the European Union is on imported graphite.  On average, over the years 2004 to 2014, the European Union only provided internally (mined) about 6% of the graphite it had available (presumably needed) for use (5,829 metric tons/103,739 metric tons).

Graphite has long been a critical material for many industries such as the steel industry.  In recent years, new and increasing needs of graphite have developed in such areas as smartphones, fuel cells, and batteries.  This increased need has prompted increased interest in more mining of graphite, especially because of concerns over China’s reduction of graphite exports.

What Is Met by Performance in Business Segment Titles?

Several chemical companies use the word performance in one, or more, of their business segment titles found in annual reports.  This blog provides information and some analysis on the use of “performance” in these reporting segment titles.

The following identify companies that use “performance” in one, or more, of their reporting segment titles, the title used, and a brief synopsis of what business is represented by the segment:

BASF.   Performance Products.  Chemicals that improve the properties of a product or a process to which they are added.

Dow.  Performance Materials & Chemicals.  Products that serve customers in a large number of industries including appliance, construction, and industrial.  The products are additive solutions for the customers’ products and services.

Dow.  Performance Plastics.   Plastic/polymer products are marketed on the basis of their performance characteristics and applications.

DuPont.  Performance Materials.  Materials are polymers and performance pertains to the polymer characteristics.

AkzoNobel.  Performance Coatings.  Coatings that are used to protect the surface and/or enhance the surfaces’ performance.

Evonik Industries.  Performance Materials.  Materials are polymers and performance pertains to the polymer characteristics.

PPG Industries.  Performance Coatings.  Performance is used to indicate the chemical is intended to perform special protective and/or surface enhancing characteristics.

Solvay.  Performance Chemicals.  Refers to chemicals that are needed by various industries and sold in large volumes.

DSM.  Performance Materials.  Materials with advanced, better performing properties that DSM has developed and feel are unique and therefore are capable of capturing market share  and higher margins.

Huntsman.  Performance Products.  Chemicals for use in various industries for enhancing those users' products and/or processes.

Laxness.  Performance Chemicals.  Chemicals use in various industries for enhancing those industries’ products and/or processes.

Laxness.  High Performance Materials.  Pertains to polymers/plastics with high performance characteristics.

Sasol.   Performance Chemicals.  Includes specialty chemicals and also commodity chemicals sold into many industries to enhance those industries’ products and/or processes.

Arkema.  High Performance Materials.  Includes both performance additives and polymers with certain performance characteristics.

Based on the above information, the term performance used in reporting segment descriptions in annual reports usually refer to one of the following:  1) additives (specialty chemicals) that enhance the performance of products or processes; 2) polymers that have certain performance characteristics; and 3) a chemical/product, other than a polymer, that is separately used (not an additive) because of its performance, such as a protective coating.   A couple of companies, Solvay and DSM, use performance in the segment title description with an economic implication, e.g. the products sold have excellent sales performance.

With these different ways in which “performance” is used to describe what is being sold (the segment's business), one should be careful to understand the company’s meaning of the word performance.

Chemical and Material Shortage Alert – April 2016

The purpose of this blog is to identify chemical and material shortages reported on the Internet.  The sources of the information reported here are primarily news releases issued on the Internet.  The issue period of the news releases is April 2016.

Section I below lists those chemicals and materials that were on the previous month’s Chemical and Material Shortage Alert list and continue to have news releases indicating they are in short supply. Click here to read the March 2016 Chemical and Material Shortage Alert list.

Section II lists the new chemicals and materials (not on the March alert).  Also provided is some explanation for the shortage and geographical information.  This blog attempts to list only actual shortage situations – those shortages that are being experienced during the period covered by the news releases.   Chemicals and materials identified in news releases as only being in danger of being in short supply status are not listed.

Section I.   None

Section II.   Shortages Reported in April not found on the Previous Month’s List

Steel:  Indonesia, Malaysia; supply not keeping up with demand

Reasons for Section II shortages can be broadly categorized as: 

1.  Mining not keeping up with demand: none

2.  Production not keeping up with demand: none

3.  Government regulations: none

4.  Sources no longer available: none

5.  Insufficient imports:  none

6.  Supply not keeping up with demand:  steel

Comparisons between Commodity, Engineering, High Performance, and Ultra Performance Polymers

Table 1 shows approximate global market values, global consumption levels, and average prices for four broad polymer categories: commodity; engineering; high performance; and ultra performance.

Table 1	2015 global market (US dollars)	2015 global consumption (metric tons)	average price (market/consumption)
commodity	$ 323,000,000,000	225,000,000	$              1,436
engineering	$    77,000,000,000	27,000,000	$              2,852
high performance	$      8,500,000,000	800,000	$            10,625
ultra performance	$          500,000,000	5,000	$         100,000
total	$ 409,000,000,000	252,805,000

The market values and consumption levels are based on data found on the Internet.  The market value and consumption levels reported on the Internet very quite a lot.  The amounts shown in the table are what I consider to be the most likely amounts based on my analysis of what was found on the Internet.

The average prices shown in the table are simply the market values divided by the consumption levels.  The prices shown in each category agree reasonably well with prices found on the Internet for polymers.  This reasonably-well agreement for prices suggests the validity of the market and consumption amounts shown in the table.  Also the total global market value ($409 billion) and the total global consumption amount (252.8 million metric tons) agree reasonably well with amounts found on the Internet for these totals.

Polymers in the commodity category include:  polyethylene; polypropylene; polyvinyl chloride; and polystyrene.  Polymers in the engineering category include:  polycarbonate; acrylonitrile butadiene styrene; polyethylene and polybutylene terephthalate; polyacetal; and polyamide.  Polymers in the high performance category include: polyether imides; polyether sulfone; fluoropolymers; liquid crystal polymers; and specialty nylons. Polymers in the ultra performance category include; polyetheretherketone; polyaryletherketone; and polyamide imides.

Table 2 below shows the percentages for each category of the total market value and the total consumption amount (e.g., $323 billion/$409 billion)..

Table 2	total global market (US dollars)	total market value as percent of total market value	global consumption (metric tons)	consumption amount as percent of total consumption amount
commodity	$ 323,000,000,000	79.0%	225,000,000	89.001%
engineering	$    77,000,000,000	18.8%	27,000,000	10.680%
high performance	$      8,500,000,000	2.1%	800,000	0.316%
ultra performance	$          500,000,000	0.1%	5,000	0.002%
total	$ 409,000,000,000		252,805,000

A principle difference in the polymers from category to category is the degree of strength that the polymer has against chemical, thermal, mechanical, and other attacks on the polymer.  The higher the strength, the lower the damage on the polymer; the higher the strength, the higher the cost to develop the polymer – both factors that influence price.

Gross Profit Margin Percentages for Chemical Distributors

According to the National Association of Chemcial Distributors (NACD), approximately $31.2 billon of recent US chemical sales is through chemical distributors.  (Click here to read about NACD and the chemical distribution industry.)

Also according to NACD, the chemical distribution industry had approximately $14.3 billion in gross profits in 2015, based on data found at their website.  (Click here to go to the NACD page from where this data can be found.)  Using $31.2 billion chemical sales through chemical distributors and the distributors’ $14.3 billion gross profit gives a gross profit margin percentage (gpm%) of 46% ($14.3B/$31.2B).

This gpm% (46%) seems rather high.  For example, two publicly-traded chemical distributors, Brenntag and Univar, only averaged a gpm% of around 20% over the past few years.  Most chemical distributors are private companies with  a lot less in revenues than Brenntag and Univar.  Perhaps smaller, private companies are able to generate larger gpm%s than the larger, publicly-traded companies, at the expense of those buying chemicals from chemical distributors.

Chemical and Material Shortage Alert – March 2016

The purpose of this blog is to identify chemical and material shortages reported on the Internet.  The sources of the information reported here are primarily news releases issued on the Internet.  The issue period of the news releases is March 2016.

Section I below lists those chemicals and materials that were on the previous month’s Chemical and Material Shortage Alert list and continue to have news releases indicating they are in short supply. Click here to read the February 2016 Chemical and Material Shortage Alert list.

Section II lists the new chemicals and materials (not on the February alert).  Also provided is some explanation for the shortage and geographical information.  This blog attempts to list only actual shortage situations – those shortages that are being experienced during the period covered by the news releases.   Chemicals and materials identified in news releases as only being in danger of being in short supply status are not listed.

Section I.   Monoethylene glycol (MEG): global; production not keeping up with demand

Section II.   Shortages Reported in March not found on the Previous Month’s List

Gasoline:  Nigeria; production not keeping up with demand

Reasons for Section II shortages can be broadly categorized as: 

1.  Mining not keeping up with demand: none

2.  Production not keeping up with demand: gasoline

3.  Government regulations: none

4.  Sources no longer available: none

5.  Insufficient imports:  none

6.  Supply not keeping up with demand:  none

Public Companies Pursuit of Biological Crop Protection Products

A 2015 article by Jay Ram Lamichhane, and co-workers, indicates that in the European Union a reduced reliance on chemical pesticides is taking place.  (Click here to read this article – PDF file.)  Other integrated pest management approaches need to take the place of chemical pesticides, including biological (the release of natural enemies, such as predators and parasitoids, and the use of bio-pesticides and bio-stimulants) crop protection products.

I conducted an Internet search to find public companies that have programs to develop biological protection products.  Ten companies were found with such programs:  Bayer; BASF; Chr. Hansen; DOW; DuPont; FMC; Narrone Bio Innovations; Monsanto; Novozymes; and Sumitomo.  Based on the information at these companies’ websites and in their annual reports, these companies view the potential for biological crop protection products favorably and are pursuing programs to produce such products.  Based on the websites and annual reports, the companies that seem to have the most activity and have developed the most biological crop protection products are:  Bayer, Narrone Bio Innovations, Monsanto, and Novozymes; then followed by BASF, Chr. Hansen, and FMC, and then followed by DOW, DuPont; and Sumitomo.

Success in replacing chemical crop protection products with biological crop protection products, based on what I have read, would be an important, needed environmental achievement.  It is encouraging that these companies seen to recognize this and also assess the likelihood of doing so to be high enough to be making substantial investments in developing such products.  It seems to me that it is only through the actions of companies, such as those identified above, that any possibility of developing biological crop protection products will be realized.