MATERIALS PRODUCTION ECONOMICS: AN EXAMINATION OF THE
VARIABLES AND RELATIONSHIPS THAT DRIVE MATERIALS PRODUCTION
AND RECYCLING IN THE WORLD ECONOMY
By
Yao-Chung King
SUBMITTED TO
THE DEPARTMENT OF MATERIALS SCIENCE AND ENGINEERING
IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE DEGREE OF
BACHELOR OF SCIENCE IN MATERIALS SCIENCE AND ENGINEERING
AT THE
MASSACHUSETTS INSTITUTE OF TECHNOLOGY
JUNE 2006
© 2006 Yao-Chung King.
All rights reserved.
iMASSACETTS INSMUTE
OF TECHNOLOGY
JUN 15 2006
R
The author hereby grants to MITpermission to reproduce
this thesis document in whole or in part in any medium now
Signature of Author:
Certified by:
Accepted by:
4 eaeering
May 26, 2006
6CThomas W. Eagar
Professor of Materials Engineering and Engineering Systems
Thesis Supervisor
Caroline A. Ross
Professor of Materials Science and Engineering
Chair, Departmental Undergraduate Committee

Material Introduction Model ..............................................................
Key Features: Production ...............................................................
Recycling Curve .
..........................................................
Materials Data Analysis: ......... ......... .........
Introduction through the Production of Steel .
...........................................
U.S. History through Steel Production in the U.S ..............................
World Production of Steel .........................................................
World Production of Structural Materials ................................................
Increase from 1945-1972 .........................................................
Increase from 1972 to 2002 ......................................................
5
5
5
Trend Discussion .................................................................
World Material Production and Population Growth ....................................
Production Growth and Population Growth ......... ... ...................
12
12
Variations in Developmental Group Population Growth as a Function of 13
7
7
9
11
11
11
11
11
Steel and Cement: Economic Factors in Less Developed Regions ......... 13
World Materials Production During the Introductory Phase ........................... 15
World Materials Pricing During Its Modem Lifetime .................................
Material Price vs. Time ............................................................
Material Production vs. Material Price .........................................
Material Price vs. Energy Price .................................................
U.S. Recycling Trends within the Steel and Aluminum Industry .....................
Historic Recycling Percentage in the U.S .......................................
Aluminum Recycling Rate Deviation ............................................
Recycling Rate as a Function of Primary Product Price .....................
19
19
19
20
Growth Analysis to Determine Market Critical Point: Four Proposed Methods.... 21
Growth Curves ...................................................................... 21
16
16
17
18
Growth (Absolute Value) Curves ................................................
Conclusion.............................................................................................
Next Steps ...............................................................
R eferences.............................................................................................
Footnotes..............................................................................................
21
22
23
24
25
26
27

New materials are being developing each year that could revolutionize the world.
However, while development of novel materials in the lab brings us one step closer to next latest-and-greatest innovation, the following and perhaps similarly difficult step requires bringing these materials to the world market. Indeed, "although U.S. firms have invested the majority of materials introduced over the past half-century, they have failed to commercialize many of these innovations" (Eagar, 98). For a material introduction to be successful, it will be useful to understand the trends involved within the market for such an introduction and for continuing survival.
This study lays the groundwork for understanding world demand by using primary source data to analyze market forces that have affected the world production of materials in the past. Because this study targets variables that do and do not affect materials production, the potential future developments from this study will be useful not only for materials introductions but also to new materials that are already to the marketplace, to people who produce those materials, and to people who recycle those materials. Indeed, the ability to forecast future material production needs will increase worldwide economic efficiency. This study focuses on structural materials, specifically, steel, aluminum, cobalt, and cement.
Because there is a sizeable history of materials production for structural staples like steel and aluminum, the data can be used to determine patterns in materials usage from introduction to market acceptance to common usage. This study begins by introducing a model for materials introductions and their respective recycling curves. It continues by analyzing the production curve for steel in the U.S., explaining the seemingly unpredictable variations from a historical perspective. The study continues by analyzing influences that have affected the world production of materials in the past, and then works to decipher to world material production curves. Because major world events occur continually, understanding which of those events will likely affect future materials production through an analysis of the past will aid the industry in operating efficiently.
This study also analyzes population growth with respect to material production, as well as suggesting one way in which asymmetries in More Developed Region growth and

Less Developed Region growth can affect the mix of materials used per capita worldwide. Material price is also analyzed.
Additionally, recycling data has been drawn to develop a relationship between materials usage and recycling volume. This relation will be useful, not just for anticipatory uses, such as for a recycler to begin setting up a plant in anticipation for the need, but also for the industry to determine the amount of material that is currently going to waste in landfills vs. materials that are still in use.
One of the key features of the proposed model is the Market Critical Point (MCP), the point in which material production begins exponential growth. This study proposes four methods to objectively determine the MCP.
Understanding market trends and the variables that affect the future of materials production will be invaluable in making the world economy more efficient. For example, market indications may determine that the MCP has just passed, implying fast, exponential market growth in the future years. Given this knowledge, mining facilities may begin to expand operations ahead of time, distributors may obtain new warehouses early, and manufacturers may purchase more equipment to prepare for the oncoming influx of demand. An investor may decide to invest, giving the industry a boost that allows the industry to be better equipped to handle the oncoming sharp increase in demand, leading to more efficient production of material applications and less market lag time response.
4

Because of the many factors that will affect the amount of material produced across different industries, it will be difficult to extract reliably a clearly defined graph from historical data. Therefore, this thesis begins by introducing a basic economic model
(Figure 1) that makes intuitive sense and then will match this model to historical data, wi7
;th
AlAII I Ull% IU1 1ll1y
deviations noted.
Production Trends
ZU.UUU,UUU.W
18000000.00
16.000.000.00
Introduction: When a new material is introduced into the market, there will be an introductory phase during
, 4.000.000.00
-- ° 12.000,000.00
2 0.000.000.00
° 6,000.000.00
which the material develops 4,000.000.00
credibility within the market.
Th;>-:
1 11I plSt
2.000,000.00
0.00
'880 1900 1920 940 1960 1980 2000 by timidity and uses are a. ! ---- ---.
likely expenmenmal ana ow
Year risk applications. This stage is the so called "dating stage" because the market is timid, but curious about the new material. This stage decides where a healthy relationship will bloom between the market and the material.
Market Acceptance and Growth: Following the slow growth introductory stage is the fast growth "market acceptance" stage. This stage represents the period when the material has proven its reliability, and projects to exploit the material's advantages become full scale, prompting larger demand from both the pioneering early users and others in their industry. Other applications may materialize, user industries expand, and a host of other causes may lead to the fast growth that characterizes this period. This period is the so called "engagement stage" because the market, now assured of its assessment, becomes committed to the new material. This fast and exciting stage also determines whether the material producers can keep up with the diverse needs of the users to continue to maintain interest in the market.
Market Saturation: This stage represents the maturation of the market for the material.
Most uses for the material have been explored and demand remains constant. Production slowly increases to fill demand and growth is slow.
Recycling Curve
The recycling curve is similar in shape to the production curve but sits below the curve and delayed in time. While the material may have production capacity for virgin product, it is unlikely that recycling technology can be implemented immediately for several reasons:

* Recycling Technology Development o While the technology is available to produce the material, there may be a delay in developing the technology to efficiently recycle the material.
This effect causes a lateral shift in the recycling curve.
o This barrier will largely impact the recycling start date.
· Questionable Necessity o Because of the size of the initial investment for research and facilities, the implementation of recycling must be delayed until product acceptance is assured.
o The faster the growth of production (i.e. the steeper the slope of the production curve), the more certain the necessity.
· Reservoir Accumulation and Product Aging o Materials must accumulate in the recycling "reservoir" so that there will be large amounts of material to be continuously recycled
· Reservoir: Material that is neither in production nor characterized as waste, the reservoir is the amount of material that is currently
"in use." The steel reservoir, for example, consists in part of steel beams that are currently holding up buildings, steel rails of railways, and steel auto bodies. These components are still in useful service but have the possibility of being recycled in the future.
o If the product in which the material is used is still in useful service, that product must age past its useful life before the material is recycled. In the steel example, the car owner must dispose of the car before that steel can be recycled.
* Waste Loss o As with most processes, recycling is not 100% efficient. It can always be expected that some of the material will end up in land fills instead of recycled.
o The recycling curve will likely stay below the production curve, barring extreme situations.
· One such situation would be a bankruptcy of most major companies in an industry. Production will drop precipitously, but the amount of material that is aged in the reservoir and available for recycling may be more than that year's production.
A

Steel-making dates back millennia as a high skilled art, but modem steel making, efficient bulk production, and widespread use began in 1855 with the introduction of the
Bessemer process, which opened the doors for bulk steel production during the industrial revolution. Steel has since found widespread use in the auto industry, in construction, and in railways, and is produced in a variety of ways. World production continues at a rapid pace as world populations develop lifestyles inclusive of products that require steel.
Steel production in the U.S. (Figure 2) will be more sensitive to events on a smaller scale than those that can affect the world production of steel. This sensitivity, evidenced in the many precipitous rises and falls found in Figure 2, will make it difficult to fit the U.S. production to the proposed model. However, reviewing the significance of
U.S. policies and world events relative to the steel industry will be a useful exercise for the drawing of trends and predictions of fluctuations.
U.S. History through Steel Production in the U.S.
The many large deviations in steel production in the U.S. can be explained through world and domestic events. Removing these effects would likely produce a much smoother production curve that is closer in shape to that of World Production
(Figure 5). For our purposes, a simplified analysis is sufficient to capture the essence of our method and is useful for the determination of significant relationships between world/national events and production.
:
Figure 2 Historical US Steel Production and Recycling
160,000,000
X
140,000,000 -
120,000,000 -
Uo100,000"000
L 80,000,000-
60,000,000-
40,000,000 -
1920
-
".
.
1940
20,000,000-
1900 1960
Year
1980
*
2000
1855: The Bessemer process make processed steel abundant. Demand steadily increases.
1914: World War I begins. Demand for steel increases more than normal as wartime plants produce steel for use in combat vehicles and other wartime products.
1919, June 28: Treaty of Versailles. Ceasing hostilities and decreased need for wartime goods causes production to drop off precipitously.
1929: The Great Depression extinguishes both steel demand and the ability to produce steel in the U.S.
7

1939: World War II begins, hastening the steel industry's recovery.
1939-1945 Demand remains strong throughout the war"
1946 Demand drops after war's end.
1946-1956: United Steelworkers Union strikes five times within this period, causing delays in production that hurt many domestic steel companies.
2
These turbulent events can account for the wide fluctuations and unpredictability seen U.S. in steel production during these years.
1959: Great Steel Strike of 1959 keeps production suppressed 3 iii . Buyers begin to turn to foreign producers.iv
1971- U.S. devalues the U.S. dollar. Apparent domestic prices decrease relative to imported products. This effect includes a beneficial effect for steel producers in the U.S.
1975- Japan passes US in steel/worker hour productivity 4
.
1979-1982 The Paul Volcker Depression decreases inflation. Foreign steel becomes more attractive as the U.S. Dollar increases in value relative to foreign currencies, causing less demand for domestic steel and more imports 5
. At the same time, the third world obtains its own steel mills, decreasing U.S. exports.
6
Both severely depress U.S.
steel production.
1980: Import quotas on specialty steel (stainless steel and alloy tool steels) were eliminated on February 13, 1980.
7
U.S Steel files antidumping petitions against foreign steel companies
.
1982: The impact of foreign steel is nearly immediate. Imports gain a larger share of the
U.S. steel market
9
1985: U.S. enacts Voluntary Restraint Agreements to aid the struggling domestic steel industry by restricting imports. Domestic steel industry starts to regain ground.
"Since the beginning of the war in 1939 expanding war-industries needs have been responsible for a continued stimulus in the production of steel ingots and castings; consequently, a new record has been established each year." (Carmony, Minerals Yearbook 1943 525)
2 "The United Steelworkers Union was founded in violence in 1942 and hostility remained its trademark.
There were steel strikes in 1946, 1948, 1952, 1955 and 1956. Some lasted a few days. Some a few months.
At least three involved full-scaled confrontations with governments. Harry Truman even seized the mills in
1952, forcing strikers back to work." (Strohmeyer 1)
3 "The Iron and steel industry experienced the longest steel strike in its history. Although consumers anticipated the strike and built up large stocks of steel, the 116-day work stoppage caused shortages in many industries. Workers were idled in the automotive, railroad, construction, and other fields, curtailing the output of many finished products." (Harris, James C.O, Minerals Yearbook 1959, 571)
4 "[I]n 1975 Japan passed the United States in productivity. The U.S. Bureau of Labor Statistics reported that the Japanese worker needed only 9.2 hours to produce a ton of steel-a spectacular improvement from their 25.2 man-hours in 1964. U.S. steelworkers required 10.9 man-hours, only a modest improvement over the 13.1 hours required in 1964." (Strohmeyer 1)
5 "Production of pig iron and raw steel and shipments of steel mill products declined in 1980 because of lower demand from most major markets.... [The International Trade Commission] determined that a U.S.
industry was being materially injured by imports of subsidized pig iron from Brazil. " (D.H. Desy, Iron and
Steel 1980, 438)
6 Eagar, Thomas. Verbal correspondence. May 22, 2006
7
These quotas were instituted on June 14, 1976. (D.H. Desy, Iron and Steel 1980, 437)
8 "On March 21, United States Steel Corp. filed antidumping petitions pertaining to five basic steel mill products exported variously by Belgium, France, the Federal Republic of Germany, Italy, Luxembourg, the
Netherlands, and the United Kingdom." (D.H. Desy, Iron and Steel 1980, 438.)
9 "Imports dropped less sharply than domestic shipments and gained a larger of the U.S. Steel market.
(Schottman, Frederick J. Iron and Steel 1982, 461)

As we have seen, international and local events can have an immediate and dramatic impact on the U.S. production curve for steel. However, the world production curve for steel lacks such a high sensitivity. This insensitivity becomes apparent when viewing the world production of steel graph (figure 3) where, as expected, there are fewer and less extreme increases and decreases. The overall trend for worldwide production shows a consistent upward growth, with the possibility of market saturation in the 1970's and 1980's. However, the continuing upward growth in recent years indicates the possibility of continued "Market Acceptance" type growth in world steel production.
Currently, the largest producers of steel are China, Japan, and the United States.
1.000,000,000
900,000,000
800,000,000
E
700,000.000
600.000.000 j
400,000,000
* *
300,000,000
200,000,000
100,000,000 Alo'
-h
0
1942 1952 1962 1972
Yer
1982 1992 2002 2012
The curve begins, almost immediately, by dipping down after the resolution of
WWII. Thereafter, rapid exponential growth takes hold until the 1970s. The curve appears to plateau starting in 1972, about the time when the change from ingot casting to continuous casting increased yield from raw steel by about 23% . The extremeness of this plateau is due partly to the type of data used to measure world steel production. The values for "Steel Produced" in Figure 3 are represented by the sum amount of raw steel produced across most steel making countries. Therefore, the values represent the amount of raw steel entering the casting process, not the amount of finished steel product." v
Given this sudden increase in yield and therefore, increase in finished steel produced per unit raw steel, the steel industry could choose to maintain current mining levels, leading to a sudden 23% jump in finished product, or decrease mining levels by from 1972 to an extrapolated period of 1975 (extrapolated to about 700 million tons) to
1979 shows about a 10% decrease.
However, it cannot be safely assumed that the increase in yield was immediate, but rather that the steel mills gradually converted their casting equipment over a long period of time. A simplifying assumption would be the incremental and linear increase of technological replacement starting in 1970 (with 0% additional yield) and ending in
'O Eagar, Thomas W. Verbal Correspondence, May 30, 2006
1 "The term raw steel, as used by the American Iron and Steel Institute, includes ingots, steel castings, and continuously cast steel. It corresponds to the term crude steel as used by the United Nations. For UN definition of"crude steel," see endnote iii.
12
A 23% yield increase from 81.3% will bring production back to 100% target production.
Q

1990 (with 23% additional yield.
13 ) Figure 4 show the results of that adjustment.
Continuous casting's additional yield accounts for only part of the drop in crude steel production. However, this adjustment does allow the 1972-1990 period to fall better in line with the previous curve.
Figure 4 World Steel Production Adjusting for
Continuous Casting a-
I
'0
1,200,000,000 n-- ---
A
Il
-B BIB i
UUUUUUUU g i l
800,000,000
M600,000,000
-
1
1400,000,000
E200,000,000
-
-
--
_
-a
..
1940 1950 1960 1970 1980 1990 2000 2010
--
Year
-- ---
Nominal Production Estimated Consumption
The period in the 1980s and 1990s was tense for the steel industry. The steel industry has been sensitized to overproducing, and limits and quotas were common worldwide for steel production and importing/exporting operations. Developing countries began opening their own steel plants, vastly oversupplying the market to suppress demand. A poor steel market and claims of dumping and unfair subsidies caused European countries and the U.S. to enforce quotas to keep their own companies profitable, which led to the suppression of production during this time.
13
It should be noted that neither ingot nor continuous casting account for all crude steel production. In the
U.S. in 1991, continuous casting continued to make headway as the share of steel produced through that method increased to 75.8% (Houck, Iron and Steel 1991, 797)
10

Increase from 1945 to 1972
The production of steel, cement, cobalt, and aluminum exhibited a sizable World
War II production increase and a post-
WWII production drop, from which production has increased at a steady pace.
1945 (after the inflated war-time demand) shows a return to normal market demand levels and will be a useful baseline from which to measure growth. Further, the period from 1945 to 1972 shows consistent growth with minimal fluctuations in all industries.
QD,000AO
.
Hiltorie Steel Production
4
*e
I oQoo
1300O000
.em
.
1
.
.....
172
Yew
Figure 5a: Steel Production Worldwide
12 2002 2012
During this period, steel shows a 6.2 fold increase from that baseline to 1972.
Aluminum shows 12.6 fold, cobalt 5.3
fold, and cement 13.3 fold.
Increase from 1972 to 2002
The slowdown in the steel industry's growth is noticeable in its increase from
1972-2002, a 1.4 fold increase, compared to 2.4 for Aluminum, 1.9 for Cobalt, and
2.7 for cement.
2,000,000,000
1,800,0,000 i 1,000,0,0
1,400,000,000
.00
1,000.000,000
800,000,000
600,000,000
E 400,000,000
8
200,000,000
0
1880 1900 1920 1940 1960 1980 2000 2020
Year
Figure 5b: Cement Production Worldwide
Historic Cobalt Production (Worldwilde)
60,000
50,000
Total Increase from 1945 to 2002
Increase in production during this period were 8.9 fold for Steel, 29.9 fold for
Aluminum, 10.1 fold for Cobalt, and 36.4
fold for Cement.
40,000
Qualitatively, aluminum production shows more stability than steel production, while cement shows the least sensitivity to world events. Cobalt, on the other hand, exhibits high fluctuations in worldwide production. This high sensitivity results from the fact that most of the world's cobalt is produced in politically unstable areas. Cobalt production is dominated by the Congo and Zambia, which combine to produce
0
1880 1900 1920 1940
Ywr
1960 1980
Figure 5c: Cobalt Production Worldwide
Historie Aluminum Production (Worldwide)
2000
30,000000.
25,000,000 j
15,000,000
10,000,000
5.000,000
0
1880 1900 1920 1940
Y"r
1960 1980 2000
Figure 5d: Aluminum Production Worldwide
2020
2020
11

48.1% of the world's cobalt in 2003, and
49.6% in 2004.
v
' Therefore, the high sensitivity and fluctuations exhibited in cobalt result both from the fact that the production is dominated by a few small countries and that those countries'
2.000,000,000
1,800,000,000 -
1,00,000,000 political conditions have been historically unstable.
400,000,000
400,000,000
Cement production, while comparable to steel in growth from 1945-1972, has fast
0 ................................-........-
1900 1920 1940 190
Ye
1980 2000 2020 outpaced the steel industry (Figure 5e.) In
1974, cement producers generated 702 billion metric tons of cement, nearly matching steel producers' 708 billion that same year. In the next 28 years, cement
Figure 5e: Historic World Production. This figure compares the worldwide production of all four materials. While worldwide production of steel and cement were comparable from the 1950's to 1970's, cement now continues to outpace steel, more than doubling its own production in a matter of 30 years.
producers would outpace steel makers, finally producing 1.8 trillion tons of cement billion tons that same year.
in 2002, double the amount of steel's 898
Growth
The world population continues to grow each year, increasing the world demand for resources. The world population crossed the 3 billion mark in 1960 and doubled to 6 billion by 1999. During the same period, steel production increased by a factor of 2.26, aluminum by 5.26, cobalt by 2.22, and cement by 5.05.
I ocmoo wooooo
89000-
9000000000
7000000000
1ot
.
0 lao o
-.- -- o0
World Population
.
1920 1940 10 tar
10
/~~~~~f xow 22 am40
___
* aoD
Assuming equal distribution of usage across the world population'
4
, the per
Figure 6a. The World Population as a Function of
Time. The world population doubled from 1960, at 3 billion people, to 1999, with 6 billion.
person usage from 1960-1999 for steel increased by 14.7%, aluminum by 166.1%, cobalt by 12.7%, and cement by 156.9% (Figure 6b.) Therefore, material production growth cannot be fully accounted for by simple world population growthS.
14
This assumption is made only for quantitative purposes to show that materials usage is outpacing world population growth.
15
However, an in-depth analysis of materials usage by country, scaled by the growth of the country's population, plotted against the growth of the industry may reveal that the growth of certain resource-use intensive societies may be driving the industry growth. The above statement does not preclude this possibility.
19

Variations in Development Group
In the past century, the population growth of"lesser developed regions" has quickly outpaced that of"more developed regions" (The terms to designate the development groups "lesser developed regions" (LDRs) and "more developed regions" (MDRs) are used as defined by the United Nations.) Currently, the world population grows at a rate of 1.2% yearly, resulting in an annual additional of 77 million people'
6
. However, a breakout of population growth by development group shows that MDR populations grow by
0.25% annually while LDR populations rise almost six times as fast, at 1.46%. 17
(Figure 6c.)
Steel and Cement: Economic Factors in
Less Developed Regions
While it may be argued that MDRs consume more resources per capita, the dominating proportion of the world population and of world population growth arising from LDRs result in high resource demands. The specific resources demanded will depend on the economic standing of the growing nations, in this case, that of LDRs.
194
.
000o.ooo.000
!
,000~0
D
160 191 200
Ye
20O 2040 2060
W.oPaWM ILOeDedb RqI .MmD pedRgl. -
Figure 6c. World Population Growth, displayed along side the growth of LDRs and MDRs.
(MDR +LDR=World) LDR growth has exploded upward, while MDR growth remains relatively constant.
As the lesser developed region (LDR) population grows, those regions will
4
,.or1 1 i.
,orn~i f ,. nt
1fw~l r' t V6nt
0.35
f
0.3
0.25
1880 1900 1920 1940
Year
190 1980 2000 2020
Figure 6b. Material Usage Per Person. On the whole, each person utilizes more materials each year than during the previous year.
16
Chamie, Joseph. "Volume III: Analytical Report."
United Nations New York 2002
World Population Prospects The 2002 Revision, http:'/iis-db.stanrlbrd.edu/Cevts/3961/Joe Chamnie Population Prospects 2002.pdf
'7 Chamie, Joseph. "Volume III: Analytical Report." World Population Prospects The 2002 Revision,
United Nations New York 2002. http://iisdb.staniiird.edlu/lCvts/3961 Chamie Population Prospects 2002.pdf
The report also notes that "the subset [of LDRs I of the 49 least developed countries is experiencing even more rapid population growth (2.4 per cent per year).
'8 In 2002, cement cost $76.00/ton while Steel cost $574.20/ton.
19 Eagar, Thomas W. Verbal Correspondence. May 30, 2005
1

require construction materials to construct buildings and other structures. Our material usage analysis shows a shifting of demand from steel to concrete, and this growth from LDRs may be able to account for the continuing speedy production growth of cement compared to steel.
i
I
80%
There are several reasons these regions will prefer cement over steel. A large incentive is price; steel costs about 7.5 as much as cement'
8
. To produce steel entails building blast furnaces and steel mills. Steel mill construction requires considerably more initial investment and entails higher operational costs than constructing cement plants. Cement plants request less than 1/1 capital cost of a steel mill l9
0th of the
. Mining capabilities further impede the LDRs ability to undertake steel production, as limestone can more easily and cheaply extracted and converted to concrete.
These cost differences mean that, for
LDR's, steel production would be difficult and expensive, implying steel would likely need to be imported if it were chosen. Cement, on the other hand, can more easily be produced locally at dramatically smaller expense.
I
4o1 eov
USr
20%
0% eee I$ e le le le le leeeleles~b
~f~~~ss~P
Y.r
J| More Reone
I
Figure 6d. Proportion of the World Population by
Development Group (LDR, top, and MDR, bottom.)
As expressed in Figure 6c, LDR growth dominates the growth of MDR. While 1950 data shows that
32% of the world population consists of MDR populations, current data shows that in 2005, MDR populations will compose only 18.7% of the world population. Moderate forecasts project that percentage to drop to 13.6% by the year 2050.
o100%
I
I
I
I
I
I
40%
2D%
Proportion (Worldwde)
Iomn.
[8-rii
The main appeal in the use of the stronger steel instead of cement is vertical capabilities. However, while the ability to construct skyscrapers is valued in densely populated and economically developed areas, tall buildings are not a requirement for many LDRs.
0%
Yw
/ee
---------` -`-`
Figure 6e. The proportions of materials each person uses. Increasingly, the mix of materials used per person has increased cement use at the cost of steel's share in the mix. Beginning with a 58.4% share among the materials analyzed, steel use in proportion to other material uses has dropped to 32.9%. Cement on the other hand, begins with a 41.1% share in 1950, increasing to 66. 1% in 2002.
Overall material use per capita is increasing across all industries analyzed. However, as can be seen in Figure 6e, the mix of materials that people use is changing. The shift in favor from steel to cement is likely the effect of increasing demand from the growing and disproportionately large LDRs in the world population.
14

Because the nature of long scale representations prevents the observation of the early, short term trends, figures 7a-c show a smaller, scaled view of production from 1900-
1945. These views were scaled to allow for the peak that occurred in all industries during
WWII. While zooming into this period has shown fluctuations not apparent in Figures 5ae, the investigations into the introductory phase show few useful or useable trends.
It is interesting to note that aluminum production, despite the decreased scale in figures 7c and 7d, still shows a remarkable amount of stability relative to the behavior of cobalt or cement production.
6,000
1
5,000
4.oooj3,000
12,000
1,000 *.
0-
1895 1900 1905 1910 1915 1920 1925 1930 1935 1940 1945 1950
Year
Figure 7a. Cobalt Production (Worldwide). Because of the small scale and few major producers, the cobalt production curve in the introductory stage varies unpredictably.
Historiol Aluminum (Worldwide 146)
2,500000 -
2.000,000
100,000,000
90,000,000
* 80,000,000
70,000,000
°. 60,000,000
= 50,000,000
40,000,000
30,000.000
20,000,000
10,000,000
· · ·
* .
1920 1925 1930 1935 1940 1945 1950
Time
Figure 7b. Cement Production (Worldwide) Cement shows a widely varying trend from 1925-1945.
300,000
250,000
Historloal Aluminum Production to 1946)
200000
; a 1,500,000-
1.000,000.
500,000
L
1895 1900 1905 1910 1915 1920 1925 1930 1935 1940 1945 1950
Year
Figure 7c. Aluminum Production Scaled to
2,500,000 tons. This production curve, despite the small scale, shows a smoother and more predictable curve than cobalt or cement.
100,000
50.000
0 ,
1895 1900 1905 1910 1915 1920 1925 1930 1935 1940 1945 1950
Year
Figure 7d. Aluminum Production Scaled to 300,000 tons. Despite scaling the data down below the peak
WWII production, the curve continues to show smooth fluctuations.

Material Price vs. Time:
Figure 8a-d shows that materials price is generally positively correlated with time, but with little predictability with respect to time. It is interesting to note that all graphs exhibit about a three fold jump starting from the early 1970's, indicating an event or influence common to all four industries. As energy use is common to all material producing industries, it is likely that the 1973 energy crisis is the cause of this increase in price.
Cobalt Price vs. Time n nn
60,000-
50,000-
40,000 .
30,000- * a 20,000-
10,000 I i O
1880
I
-~~~-
V I
~
_ _ I
Figure 8a Cobalt Price Since 1900
--
I n 0WA Nh
1900 1920 1940 1960 1980
~~~~
I
2000 2020
Steel Price vs. Time
700.00
600.00
Ot
500.00
3 40.00
1 300.00
200.00
100.00
wcv
0.00
880 1900 1920 1940 1960
Yr
1980 2000 2020
Figure 8b Steel Price Since 1900
3000
2500
.
2000
1500 -
500-
1880 1900 1920 1940 1960 1980 2000
Year
2020
Figure 8c Aluminum Price Since 1900
90.00
80.00
70.00
60.00A.
j
50.00
|
L 30.00
20.00
10.00
0.00
1880 1900 1920 1940 1960 1980 2000 2020
Year
Figure 8d Cement Price Since 1900
It should be noted that gas and oil prices (figure 9a-b) markedly increased on
October 17, 1973 when OPEC announced its embargo. (Oil prices jumped from
$.738/million BTU in December 1973, to $1.91/million BTUs in January, 1974. Gas Prices starting at $.294 in December 1974 increased to $.568 in December of 76.) Energy price changes before 1973 appear to be gradual and in-line with the previous trend. At the same time, major price changes across the four studied industries increased by about a factor of three from 1973-1980. Steel's price peaks in 1984, while the price peaks for Aluminum,
Cobalt, and Cement peak on or near 1980. Oil prices peak on July 1, 1980, while gas prices continue to rise, peaking in 1984. This correlation would suggest that the price of steel is tied more closely to the price of natural gas, while the price of aluminum, cobalt, and cement are better related to the price of oil.
16

4
3.5
3
2.5
2
Energy Prloe (Natural Gas) v
14
10-
Energy vs.
1925 1935 1945 1955 1965 1975 1985 1995 2005
Figure 9a Gas prices starting in 1930 ($/million BTU)
Gas Prices starting at $.294 in December 1974 increased to $.568 in December of 76. Another peak begins in 1992.
1941-01-24 1954-10-03 196806-11
Year
1982-02-18 1995-10-28
Figure 9b Oil Prices Starting in 1946 ($/million BTU)
Oil prices jumped from $.738/million BTU in
December 1973, to $1.91/million BTUs in January,
1974
there is a positive correlation, this correlation is weak at best. There is little evidence to show that the amount of material produced to meet demand is inversely related to price.
The positive correlation seen is likely correlation, not causation.
Cobalt Production vs Price
60,000
50,000
* 40,000
130.000
20,000
*
10,000 i
0
0 10,000 20,000 30,000 40.000
Prie (lon)
50,000 60,000 70,000
Figure 10a Cobalt Production vs. Price
Aluminum Production vs Prioe
Steel Productlon vs Prioe
1,000.000,000
900,00.000
800,00,000
700000,000
5
500,000,000
400,000000
300,000,000
200,000,000 -
100,000,000
0.00 100.00 200.00 300.00 400.00 500.00 600.00 700.00
Figure 10b Steel Production vs. Price
Cement Produotion Price
21,00,000,000
1.200000,000
1 .000,000 o. o
0 500 1000 2.000
Prie (Mt.)
Figure 10c Aluminum Production vs. Price
2,500 3,000
400,000,000
200,000,000
0
000 10.00 20.00 30.00 40.00 50.00 6.00
Prioe (/on)
70.00 80.00 90.00
Figure 10d Cement Production vs. Price
17

All materials except cobalt showed a moderate to strong correlation with energy
prices. The R
2 values to a logarithmic fit
20 for cobalt, aluminum, steel, and cement with
respect to oil prices are, respectively, 0.5868, 0.7757, 0.9092, and 0.868. The R
2 values to a logarithmic fit
2
' for cobalt, aluminum, steel, and cement with respect to natural gas prices
are, respectively, 0.6391, 0.8335, 0.9712, and 0.9484. The logarithmic fit for all materials
shows higher correlations, without exception, with natural gas prices than with oil prices.
Based on this evidence, it is likely that energy prices, especially that of natural gas, plays a dominant role in determining the price of steel and cement, and possibly aluminum.
70000.00
6000o.00
3
4
0 00 0
.
00
0.00 -.
-10000.00
1 2 3 4 5
Price TU)
I Cment Aluminum Steel Cobatl
6
Figure 11 a Materials Price vs. Oil Price. Cobalt shows a weak logarithmic correlation with oil price.
7
70.000
60,000
50,000
Logarithmlo Price vs. Natural Gas Prloe
20,000
10,000
OA·
-10,000
Logarithmlo Material Price vs. Oil Prie
Prbe ( Inilllon
[Auimmum Stee - coblt Ceentl
Figure 12a Materials Price vs. Natural Gas Price.
Cobalt shows a weak logarithmic correlation with oil price.
_
Logarithmic Fit: Material Price vs. 011 Price
3000.0e
2500.0
2000.0
R' 0.77!
1500.0
1000.0
_ R -
500.00
0.0
-500s.0
1.00 2.00 3.00 4.00 LOO 6.00 7.00
Price (S/million BTU)
-
* Cement Aluminum Steel
Log. (Alurinnr Log. (Sted) Log. (Cement)
I 11~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Figure I lb Materials Price vs. Oil Price (zoom)
Aluminum, cement, and steel all show moderate to strong correlation with oil price.
Logarithmic Material Price vs. Natural Gas Price
3000.00
2500.00
200000-RsO
.1500.00
1000.00
500.00
0.00
0
_ fR
2
09712
O
0.5 15
I
2 25 aTU)
{ · Cement Aluminum Ste
3 3.5
Figure 12b Materials Price vs. Natural Gas Price
(zoom). Steel, Aluminum, and Cement show moderate to strong correlations with gas prices.
4
20
A linear fit was also applied. The R
2 values for a least squares regression linear fit for cement, aluminum, cobalt, and steel prices with respect to oil prices are, respectively, 0.7506, 0.6459, 0.5398,
0.7932. The R
2 values for cement, aluminum, cobalt, and steel prices with respect to natural gas prices are, respectively, 0.8857, 0.7341, 0.5899, 0.8985. The correlations between material price and energy price are higher across the board for natural gas instead of oil using a linear fit. However, the logarithmic fit showed higher correlations without exception for both oil and natural gas prices.
1R

Recycling trends will be useful in determining future recycling needs. Though recycling takes place in most developed nations, this analysis will shed light on U.S.
recycling trends. As can be see from Figure 13a-b, steel recycling in the U.S. seems to follow directly with production. Most fluctuations observed in steel production are seen immediately in recycling. Aluminum shows a loose correlation between production and recycling.
160,000,000
- 140,000,000
1-
% 100,000,000 eS lOOOO,OOO Ps-g* in i. no
*
8 60,000,000
60,000,000 *
40,000,000
-
.
.
A
· 20,000,000 .
0
*.
1900 1920 1940
* ;'
1960 1980 2000
Year i
Recycled
Figure 1 3a U.S Production and Recycling of Steel.
Recycling fluctuations follow steel without delay.
Historic Recycling Percentage in the U.S.
8,000,000
7,000,000
6,000,000
5,000,000
4,000,000oo
3,000,000
2,000,000
,
1,000,000 -..
0 ..........
1880 1900
C
, ,-
1920 1940
Year
1960 1980 2000
Aluminum Old
2020
Figure 1 3b. U.S. Production and Recycling of
Aluminum. Loose correlation is observed.
Figure 14a-b shows the historic recycling percentage in the U.S for steel and aluminum. Steel shows a consistently high recycling rate of about 70% that has stayed consistent since 1950. Aluminum shows the beginning of consistency starting in 1960 and then begins to increase starting in 1970, passing the 50% mark in 2001. This increase in rate can be rationalized from a historical perspective.
Aluminum Recycling Rate Deviation
Histoo Steel Rcycling Perentae in the U.S.
Despite being the most abundant metallic element in the earth's crust
(between 7.6-8%), aluminum is one of the most difficult metals to refine because it quickly forms a stable oxide that resists flaking. Interestingly, the property that makes aluminum desirable for many applications also makes its production very difficult and energy intensive. Recycling aluminum, in contrast, consumes only about
5% of the energy required to produce the
120
100
40
20
1930 1940 1950 1960 1970 1960 1990 2000 2010
Year
Figure 14a. Historic Steel Recycling Percentage in the U.S. The recycling percentage remains relatively consistent at 70% starting in 1950.
1Q

virgin product. The 1973 energy crisis made the aluminum situation in the U.S. very difficult, and among the U.S. responses was to enact bottle deposit laws
2 2 to encourage aluminum production by recapturing aluminum from the recycling reservoir. This government incentive in the face of the energy crisis explains the rise in % recycled beginning in 1973.
Figure 14b. Historic Aluminum Recycling
Percentage in the U.S. Recycling begins haphazard and stabilizes beginning the in 1950's and 1960's.
The eventually rise in recycling percentage begins in the 1970s, when the 1973 energy crisis prompts enactment of bottle deposit laws.
As has been shown in the previous section, materials prices show high dependence on energy costs. Given that recycling often results in energy savings that translates into less expensive secondary product, the relationship between recycling percentage and the price of primary product was explored. Interestingly, percentage recycled and price shows a high degree of inelasticity in the case of steel. Aluminum shows a weakly positive correlation because percent recycled and price of the primary product.
Steel Recycling Price
100
80
I ii
60
49,
An m.
r~.., ·. · · i. o0 .
h
0.00 100.00 2.0000 3.0000 400.00 500.00 600.00 700.00
Pdo (lionl
60
50-
,40 j30
-20
10
0
0 500 1,000 1,500 2.000 2,500 3,000
Figure 15a. Steel Recycling and Steel Price.
Recycling and Price show a high degree of inelasticity.
Figure 1 5b. Aluminum Recycling and Aluminum
Price. No trend is immediately obvious, though recycling and price show a weak positive correlation.
l
22
Aluminum cans manufacturers are the second highest users of aluminum, next to the transportation industry. The bottle deposit laws began with Oregon in 1972, and then continued in 1973 with Vermont, and in 1978 with Maine and Michigan. Today, the U.S. Census bureau states 30% of the US Population resides in states with container deposit laws.
9I0

The ability to determine the end of the introductory phase and the beginning of the market acceptance/fast growth phase (the market critical point) will be invaluable in predicting the need for future plant and mine construction. Below are four proposed methods to aid in determining the MCP. While the MCP becomes more easily identifiable in these figures, one must keep in mind that these convergence points are only identifiable because of the context in which they are viewed. It is the benefit of hindsight and the ability to see the entire history that allows identification in these cases.
However, there is hope that these methods may be able to aid in predicting the MCP out of context to predict the beginning of the exponential growth associated with the Market
Acceptance/Growth Period.
Growth Curves
Upon analysis of industry production growth curves (Figure 16a-d), it is apparent that the early stages (the introductory stage) exhibits high variation that collapses into a much tighter formation of growth points. Comparisons between this "collapsing" points and historic production curves (Figures 5a-d) shows that these points seem to initiate the beginning of the Market Acceptance/Fast Growth stage of a material's introduction.
Steel Production Growth (World Wide)
0.40
0.30
0.20 6
_odi 4t 19s
-0.20
-0.30
-0.40
960 197 1 90 *2000 2010
Figure 1 6a Historic Steel Production Growth
Cobalt Production Growth (World Wide)
1.0
0.80-
0.60-
0.40- A "
_
* .- C
I "·' _ _ v 0.00"- . _0'
1 8 :}O 2020 ldl 1
-0.40- ·
-0.60- an of -v.
*
*
Year
Figure 16c Historic Cobalt Production Growth
Aluminum Production Growth (World Wide)
0.8
0.6
0.4
0.2-
0
6 -
-0.4
-0.6
*
Year
Figure 16b Historic Aluminum Production Growth
Cement Production Growth (World Wide)
0.4
0.3
0.2 o
-0. I
-0.2 -
-0.3
-0.4
41
,
^
1gag 2. -20
Year
Figure 16d Historic Cement Production Growth
91

Growth (Absolute Value) Curves
The data points graphed (Figure 17a-d) are the absolute values of the points in the previous method. The idea is to obtain high variation in the introductory stage that will collapse at the MCP.
r
Absolute Steel Production Growth (World
Wide)
Absolute Aluminum Production Growth (World Wide)
0.9
0.45
0.40
0.35
0.30
0.25
0.20-
0.15
0.1C
0.05. ..
1940 1950 1960 1970 1980 1990 2000 2010
Year
0.7
0.6
0.5 o0
0.1
0
1880 1900 1920 1940
Year
1960 1980 2000 2020
Figure 17a Steel Growth (AV) Curve rid-
Absolute Cobalt Production Growth (World
Wide)
Figure 17b Aluminum Growth (AV) Curve
Absolute Cement Production Growth
(World Wide)
0.35-
0.25 *
0.2-
0.15 *
0-
1920 1940 1960
Year
1980 2000 2020
I Figure 17d Cement Growth (AV) Curve Figure 17c Cobalt Growth (AV) Curve
Growth 5-point Traveling Standard Deviation Curves
To utilize the difference in spread in the introductory stage vs. the market growth stage, the standard deviation is obtained for the set of data points containing that year and the four previous years. These standard deviations are graphed below (Figure 1 8a-d).
Growth STDev
Steel Production Growth 5 pt Moving STDev
(Worldwide)
0.25-
0.20[
0.15-
0.05 *--
0.00
1940 1950 1960 1970 1980 1990 2000 2010
Year
0.45
0.4
0.35
0.3
0.25
0.2
0.15
0.1
0.05
'
'a
1880 1900 1920 1940
Year
190 1980 2000 2020
Figure 18a Steel Growth 5pt Traveling STDev Figure 1 8b Aluminum Growth 5pt Traveling STDev
99

Cobalt Production Growth 5 pt Moving STDev
(Worldwide)
1.801
1.6C
1.40
1.00
0.80-
0.60
0.12
0.1
0.08 *
Growth STDev
1880 1900 1920 1940 1960 1980 2000 2020
Year
Figure 18c Cobalt Growth 5pt Traveling STDev
Growth 5-point Traveling Variance Curves
0.02 t .
G
0
1920 1930 1940 1950 1960 1970 1980 1990 2000 2010
Year
Figure 18d Cement Growth 5pt Traveling STDev
These curves (Figures 19a-d) take advantage of the same spread difference, but also magnifies the difference between low spread and high spread time periods.
Steel Production Growth 5 pt Moving Var
(Worldwide)
0.061
0.05-
0.04
0.03-
0.02
0.01 .
4
1940 1950 1960 1970 1980 1990 2000 2010
Year
Figure 19a Cobalt Growth 5pt Traveling Variance
2.
2
STDev Growth (5 pts) World Production Cobalt
1880 1900 1920 1940 1960 1980 2000 2020
Year
Figure 19a Cobalt Growth 5pt Traveling Variance
0.12
Aluminum Production Growth 5 pt Moving
Var (Worldwide)
1
0.06
O .
1880
*
1900 1920 1940
Year
1960 1980 2000 2020
Figure 19b Aluminum Growth 5pt Traveling
Variance
0.014 -
0.012
0.01 -
0.008
0.006
0.004
0.002
0
1920
,
A#
1940
(Worldwide)
...
1960
Year
1980 2000 2020
Figure 1 9a Cement Growth 5pt Traveling Variance

Several key observations and questions are drawn from this study. These observations merit further study, and the implications from potential future work may lead to aiding the efficiency of the world economy.
Based on the steel industry study, the slow down in steel production can be explained by the dual influences of rapid increase in finished steel as a result of the continuous casting technique and the further construction of large steel mills in developing countries. This increase in competition and yield flooded the market with steel, and lead to a slow down in world production for more than a decade. This effect can be used in an anticipatory fashion when further technological develops increase the yield for other industries.
Aluminum and cement show strong promise to continue their rapid growth.
Based on the data available, it seems likely that steel will overcome the slowdown in the
1970s as the growing world population and increasing per capita material use begins to make up for the excess steel production.
Based on the World Product of Structural Materials data, the growing world population cannot fully account for the increase in materials production. Taking the world as a whole, the per capita use for materials is growing in all industries analyzed.
This data also makes it clear that concrete is the fastest growing structural material analyzed. While cement has outshone the steel market, this study also suggests a steel resurgence within the next decade and further as the large populations in a LDR develop into a steel using MDR. LDRs have an anticipated growth rate of 1.46%, while
MDRs are anticipated to grow at .25%. These growth projections have implications for the future of worldwide cement and steel productions.
This study failed to identify useful trends in the introductory phase of materials.
Based on the World Materials Pricing data, it was determined that material production has a loosely correlated effect on price. The most significantly correlated variable is the price of energy. The price of energy shows a moderate to strong logarithmic relationship with material price, and in this study, the price of natural gas had a stronger correlation than oil for all materials studied.
Based on the U.S. Recycling Trends data, the U.S. recycling rate for steel counterintuitively appears to have no relation to steel price. The recycling rate for aluminum is loosely positively correlated with price.
Finally, methods to determine the MCP have been suggested.
94

Next Steps
One of the key next steps is to substantiate the above conclusions with additional data analysis from other industries and further in depth analysis of the four industries studied. More information must also be collected to determine the causes of the existence or lack of certain relationships. Many of the above conclusions need further verification and exploration:
While it is useful to understand that per capital materials use is increasing, explorations are need to determine whether that statement holds true for other materials.
A country by country analysis will be helpful to determine whether the growth of certain countries are driving the increase or decrease of materials use, as suggested by the MDR-
LDR relation with cement and steel. This study has pointed out the correlation and a rationale, but has not verified causation to a high degree of certainty.
Further study into the rate of conversion from LDR-MDR will help determine the future changes in steel and concrete usage per capital.
Analysis of more industries may be helpful in identifying useful trends in the introductory phase of materials.
Further study into the variables affecting materials price is needed. The current relationship between price of energy and price of material shows high correlation, but without proof of causation. It is possible that the same factors that affect energy price also highly affect materials price.
Recycling trends seem to hold at steady levels except throug large scale intervention. In aluminum's case, the government gave an incentive to recycle.
Hypotheses to be explored include whether steel recycling is constant because all recycling rates tend to stay constant (as seems to be true for aluminum before the bottle deposit laws) or because there exists a definable gradient as a barrier to increasing the recycling rate.
Steel's recycling rate is notably high. Further study into the source of steel that is recycled may shed light onto why that industry has such a high recycling rate.
Finally, methods to determine the MCP have been suggested that can help objective identify the MCP in hindsight. More analysis should be done to identify the
MCP within the first several years of its passing. Additionally, it should be noted that the
MCP for all industries analyzed occur within a small range. While this study took high variance in production as an indication of the introductory phase, high variance in production may simply be a characteristic of that time period. Similarly, low variance in production may also be an artifact of a certain time period. Study outside of the realm of materials (such as the introduction of a new product) may aid in understanding the variance phenomenon on a smaller time scale.
?5

References
Note: Most sources have been referenced in the Footnotes Section. It should be noted that the data for the amount of materials produced world wide was obtained from the
United States Geological Survey and the U.S. Bureau of Mines through their Minerals
Yearbooks and previous incarnations of the same publication. Data for the spot price of oil and natural gas was obtained from Dow Jones and Company. World population data, including the proportion of LDRs and MDRs was obtained from the United Nations and the U.S. Census Bureau.
Houck, Gerald W. "Iron and Steel Year 1991." Minerals Yearbook 1991. 1991. 1940.
United States Department of the Interior Government Printing Office. 795-828.
http://digicoll.liblrarv.wisc.edu/cgi-bin/EcoNatRes/EcoNatResidx?tcpe=artic c&did=ECONATR ES.0056.0967.0040&isize=M
Chamie, Joseph. "Volume III: Analytical Report." World Population Prospects The 2002
Revision, United Nations New York 2002 littp://i i s-db.stan blrd.cdu/evnts/396 1/Joe Chamic P'opulation Prospects 2002.pd t
Eagar, Thomas W, "Bringing New Materials to Market," Technology Review; Feb 1995,
98,2; pp 42.
Eagar, Thomas W, "The Steel Market Today and Tomorrow," Modern Steel
Construction, Oct 1991, pp. 40
Dow Jones and Company. "Spot Oil Price: West Texas Intermediate" Wall Street
Journal. 2006.
Population Division of the Department of Economic and Social Affairs of the United
Nations Secretariat, World Population Prospects: The 2004 Revision and World
Urbanization Prospects: The 2003 Revision. http://esa.un.org/unpp
Data 1950-2050 US Census Bureau

Endnotes iEarle, James S.; Carmony, Harold E. "Iron and Steel Scrap Year 1939." Minerals
Yearbook 1939. 1940. United States Department of the Interior Government Printing
Office. 503-526.
idx'?typc=turnl&entitv=EcoNatRes005682905 13&isizc=-M
"During the first half of 1939 the rate of consumption was fairly stable and approximated the levels established in the last quarter of 1938, buy with the outbreak of war in Europe demand improved as steel production soared to record proportions in the closing months of the year. The consumption of scrap probably reached an all-time peak in November
1939." (503)
" Ridgway, Robert H.; Carmony, Harold E. "Iron and Steel Scrap Year 1940." Minerals
Yearbook 1940. 1941. United States Department of the Interior Government Printing
Office,.499-521.
http://digicol l.library.wisc.edu/cgi-bin/EcoNatRes/EcoNatRcsidx'?tv pe=tur!m&entity=EcoNatRes00 56083)00508&isi ze=M
"Exports of ferrous scrap from the United States in 1940 declined 21 percent from 1939 mainly because exports to several countries that were involved in the European War were eliminated and because exports to countries other than the United Kingdom and the
Western Hemisphere were restricted beginning in October. ... Immediately after war broke out in September 1939 the International Scrap Convention- a centralized buying agency for European consumers- suspended operations." (500)
Carmony, Harold E. "Iron and Steel Scrap Year 1941." Minerals Yearbook 1941. 1943.
United States Department of the Interior Government Printing Office. 517-540.
http://d igicoll.library.wisc.edu/cgi-bin/EcoNatRes/EcoNatResidx'?tlpc=alticle&did=ECONATRES.0056.0831.0()29&isize=M
"Under the impetus of greatly increased activity in war industries steel-ingot production in 1941 surged to unprecedented heights, creating the greatest demand for iron and steel scrap ever known. The production of steel ingots in 1941 increased 24 percent over that in 1940.... During the first 6 months of 1941, scrap consumption was fairly stable, but with the accelerated rate of war-materials manufacture, demand improved as steel production soared to record proportions in the closing months of a year (517)
Carmony, Harold E.; Cullen, H. L. "Iron and Steel Scrap Year 1943." Minerals Yearbook
1943. 1945. United States Department of the Interior Government Printing Office. 517-
540.
httir://di gicoll. ibrar y.wisc.edu/cgi-bin/EcoNatRes/EcoNatResidx?tvpc=aarticle&did=ECONAT RES.0056.0833 .0030&isizc=M
97

Melcher, Norwood B.; Larkin, James E. "Iron and Steel Scrap Year 1945." Minerals
Yearbook 1945. 1947. United States Department of the Interior Government Printing
Office. 522-543.
"The supply of iron and steel scrap in the United States was critically short throughout
1945. Except for a small increase in consumpers' stocks in the Southeastern district, all districts reported declines from the previous year, indicating that suppliers were unable to meet the demand, even though requirements decreased considerably during the year."
(522)
"Battlefield scrap has been considered a means for bolstering the dwindling supply of purchased scrap in the United States, but full utilization has not yet been deemed advisable because of the high alloy content and the presence of contaminating elements normally undesirable in steel compositions. These elements are copper, tin, cadmium, zinc, lead, and some boron and arsenic from enemy sources. Arsenic which is not removed in the melting process and is present in some German steels has a detrimental effect on the toughness of steel and its response to heat treatment. Therefore, it is felt that before battlefield scrap can be successfully used in making American steels it must be properly segregated. Dealers were not able to segregate this scrap properly due to the labor shortage, but since hostilities have ceased abroad it is expected that the battlefield scrap will be returned to the United States, properly segregated and will eventually flow into commercial channels." (523) iii Harris, James C.O. "Iron and Steel." Minerals Yearbook Metals and Minerals 1959.
1947. United States Department of the Interior Government Printing Office. 522-543.
"At the end of 1959 blast- and steel-furnace capacities reached new peaks of 96.5 million and 148.6 million tons. Steelmaking capacity increased 0.9 million tons, compared with
6.9 million in 1958, and blast-furnace capacity increased 1.9 million tons, compared with
3.6 million in 1958. New steelmaking capacities, by type of process and gain or loss during 1959, in million tons, were: Open hearth, 126.6 (plus 0.1); electric, 14.4 (plus 0.9); oxygen, 4.2 (plus 0.1); and Bessemer, 3.4 (minus 0.2). Advances in technology included increased unit blast-furnace output through the improved preparation of raw materials and the use of natural gas in the blast furnace. Algoma Steel Corp., Ltd., used iron-ore agglomerates to replace over 50 percent of the scrap used in its basic oxygen converters, without any apparent loss in metallic yield. At an experimental oxygen converter installation in Donawitz, Austria, the scrap charge was increased from 30 to 50 percent."
,v Strohmeyer, John. "The Demise Of Big Steel." Alicia Patterson Foundation Fellowship
Program. 1984. APF Reporter Vol 7 #4.
http://\Nww.aliciapatterson.org/APF0704/Strohmeycr/Strohmevcr.ltmn
Then came the strike of 1959. Steel production had fallen off the year before in a brief recession to 85 million tons, the lowest since 1947. Profits were down, costs were getting out of line and the industry decided it was time to challenge the union not only on wages but also on padded work crews and inflexible work rules.

The strike started in the middle of July, and ... many steel customers were less confident and turned to markets abroad. That was the year steel buyers discovered that other nations also sold steel. At first they dealt with the Europeans and then the Japanese came on fast.
[I]mports jumped from 2 million tons in 1958 to 5 million tons in 1959. They were never again to return to the 1958 level.
Tom Crowley, a Yale graduate who became general manager of Bethlehem's Johnstown,
Pa., plant, recounts the subtle market changes after the strike.
"The big customers came back," he said, "but we began to lose the by-products-nails, field fence and barbed wire. It was nickel and dime impact at first but it started to affect the cost structure because we were now selling a smaller piece of the product."
"And soon we were competing with a market we could not match. Belgian barbed wire was being delivered on the docks at Baltimore at less money than it cost us to make it."
"They should have learned several lessons after the 1959 strike," says Don Swan, who is now a securities broker in New York. "First, if there is cheap steel out there-even if it is only 5 percent of the market-it is going to impact on the price of the other 95 percent.
Second, the strike showed there was a group of steel users looking to up their profit margins and this type of user discovered the cost benefits of foreign steel."
' The UN defines: iron, pig iron and crude steel [code 82]
Long name iron, iron ore, pig iron and crude steel
Various mineral aggregates from which iron metal is obtained by the conversion of various iron ores by reduction either into pig iron, in blast furnaces or electric furnaces, or into a spongy form (sponge iron) or into lumps by various direct reduction processes. Iron ore is measured by the weight of the ore and may contain varying concentrations of metal. (11) CPC
Vers. 1: Iron ores and concentrates, other than roasted iron pyrites (Group 141). Basic iron and steel (group 411).
United Nations, Statistics Division http://unstats.un.org/unsd/cdb/cdb_dict_xrxx.asp?def_code=82
" Shedd, Kim. "Cobalt". U.S. Geological Survey. Mineral Commondity Summaries. January 2004.
http://minerals.er.usgs.gov/minerals/pubs/commodity/cobalt/cobalmcsO6.pdf
Shedd, Kim. "Cobalt". U.S. Geological Survey. Mineral Commondity Summaries. January 2005.
http://minerals.er.usgs.gov/minerals/pubs/commodity/cobalt/cobalmcsO6.pdf
9