4 ms·

Wouldn't economies of scale push in the opposite direction?

AnimalMuppet 8y ago
No. At price X, there are Y tons that are economically extractable; at price 2X there are more than Y tons that are economically extractable. If you want more than Y tons of it, the price is going to have to be more than X.
- starbeast 8y ago
  If there is low demand for something, then there is low production and the production costs are high per unit. High demand will at first push the price up, but if there is ability to scale production of the resource, the price per unit should then come down, as the production costs per unit will drop due to economies of scale.
  - AnimalMuppet 8y ago
    True, but in resource production, that rarely is what dominates. The problem is that, as you try to produce more, you're having to process ore that has lower and lower concentrations of whatever you're trying to extract. You can get a more efficient facility if you have the volume, but the lower concentration (usually) dominates, and so the cost goes up rather than down.
    - starbeast 8y ago
      I don't think your analysis here is right. If you look at the history of the price for aluminium, it has steadily dropped as production has risen, which is the opposite of what you are saying. And to pick another metal, the lowest copper price of the last 100 years was around the year 2000.
      - philipkglass 8y ago
        I upvoted you, pfdietz, and AnimalMuppet because you are all correctly describing different phenomena that can increase and decrease the prices of a mineral commodity. Increasing demand pushes up the price, which spurs searches for additional resources and improved extraction techniques. Improved techniques and the discovery of more resources can push the price down again, sometimes even below the price before major industrial demand started. Uranium is cheaper in the 21st century than prior to its large scale industrial use. Platinum remained more expensive after demand shot up from catalysts, despite huge investments in improved extraction and the discovery of new resources. I'm not trying to make predictions about the price movement of beryllium following a very successful ARC demonstration. I'm just pointing out that you can't look at current resource levels and divide by annual production rates to learn when resources will fall to 0. Making predictions about future prices is particularly hard when an element currently has only niche uses (e.g. beryllium, thorium, thallium, rubidium).
- VBprogrammer 8y ago
  I'm certainly no expert in the matter but couldn't this be constrained in other dimensions rather than availability of the source material. For example capital requirements of whatever extraction / purification steps are required vs the global demand. Therefore increasing demand could cause investment which increases supply? That said, if Fusion power ever becomes a reality I hope it doesn't depend on some difficult to source material.
- deleted 8y ago
  [deleted]

No. At price X, there are Y tons that are economically extractable; at price 2X there are more than Y tons that are economically extractable. If you want more than Y tons of it, the price is going to have to be more than X.

starbeast 8y ago
If there is low demand for something, then there is low production and the production costs are high per unit. High demand will at first push the price up, but if there is ability to scale production of the resource, the price per unit should then come down, as the production costs per unit will drop due to economies of scale.
- AnimalMuppet 8y ago
  True, but in resource production, that rarely is what dominates. The problem is that, as you try to produce more, you're having to process ore that has lower and lower concentrations of whatever you're trying to extract. You can get a more efficient facility if you have the volume, but the lower concentration (usually) dominates, and so the cost goes up rather than down.
  - starbeast 8y ago
    I don't think your analysis here is right. If you look at the history of the price for aluminium, it has steadily dropped as production has risen, which is the opposite of what you are saying. And to pick another metal, the lowest copper price of the last 100 years was around the year 2000.
    - philipkglass 8y ago
      I upvoted you, pfdietz, and AnimalMuppet because you are all correctly describing different phenomena that can increase and decrease the prices of a mineral commodity. Increasing demand pushes up the price, which spurs searches for additional resources and improved extraction techniques. Improved techniques and the discovery of more resources can push the price down again, sometimes even below the price before major industrial demand started. Uranium is cheaper in the 21st century than prior to its large scale industrial use. Platinum remained more expensive after demand shot up from catalysts, despite huge investments in improved extraction and the discovery of new resources. I'm not trying to make predictions about the price movement of beryllium following a very successful ARC demonstration. I'm just pointing out that you can't look at current resource levels and divide by annual production rates to learn when resources will fall to 0. Making predictions about future prices is particularly hard when an element currently has only niche uses (e.g. beryllium, thorium, thallium, rubidium).
VBprogrammer 8y ago
I'm certainly no expert in the matter but couldn't this be constrained in other dimensions rather than availability of the source material. For example capital requirements of whatever extraction / purification steps are required vs the global demand. Therefore increasing demand could cause investment which increases supply? That said, if Fusion power ever becomes a reality I hope it doesn't depend on some difficult to source material.
deleted 8y ago
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