How Much Petrol Costs Internationally

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“Finland has produced so many brilliant distance runners because back home it costs $2.50 a gallon for gas.”  Esa Tikkannen, 1979

“It’s better to have beer in hand than gas in tank.” Unknown

Some people would say petrol prices are one of the highest outgoings from their budget – but this isn’t the case universally. So what causes this?

The differences in gas prices across countries are due to the various taxes and subsidies for gasoline.  All countries have access to the same petroleum prices in international markets, but then decide to impose different taxes. In some cases, like Venezuela, the government even subsidises gasoline and therefore people there pay close to nothing to drive their cars.

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So, assuming you have a 60 liter car, the cost of one tank will vary considerably.  A tank of petrol in Venezuela would buy you a candy bar ($0.60). A tank of petrol in Norway, the most expensive on the list, would get you a weekend holiday ($153). In China you could get an IPod ($81). In the UK you could get a family trip to the capital ($129). And finally in the USA, you could get dinner for two in a mid range restaurant ($58).

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In fact production of gas is relatively the same universally. The crude oil, which is a mixture of hundreds of liquids of different boiling points is put into a huge column and heated from the bottom. The liquids with the lowest boiling points rise up the column and are collected from the upper regions. Other liquids are collected part way down and heavy oils are collected from the bottom. Tar is found to collect at the base of the column. Petrol is one of the low boiling liquids that are collected near the top. So in fact savings could be made from more efficient production processes, like updating their equipment.

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Shanghai Metal manufactures steel petrol boilers. Our Boiler Plate Steel is in stock and readily available, and can be cut to size and shape according to specific design requirements. All work is governed by an independently accredited and regularly audited quality system and is ISO 9001 certified. To find out more, please visit our websiteLinkedInTwitter, Facebook and Instagram. Or you could try our new mobile app by scanning our QR code.

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Sources: Global Petrol Prices, Travel Costs, Quote Garden

Siobhan R.// SMC Editor

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Dispute Resolution Moves To Stabilize World Copper Prices via Indonesia

Indo CopperAccording to the London Metal Exchange on Monday 28th July 2014 world Copper prices appear to have stabilized despite rising global demand putting inflationary pressures on the price. This is a direct result of the American natural resource company Freeport-McMoRan who has an industry leading global portfolio in mineral assets, significant oil and gas resources and a growing production profile. Yesterday Freeport was able to settle a six month long tax dispute with the Indonesian government, allowing for the resumption of Copper exports from major Indonesian mines such as in the Grasberg mineral region in West Papua (containing approximately 35.6 billion pounds of Copper) to key global Copper consuming nations such as China and India. Freeport-McMoRan is expected to export approximately 756,000 tonnes of Copper in the second half of 2014.

Settlement of this on-going tax dispute has doused the predominately bullish global Copper market in cold water despite sturdy factory growth in both China and the Euro-zone strengthening the overall world demand for Copper ore throughout the month of July. Additionally, economic data from Beijing has confirmed that the Chinese economy has weathered the economically choppy first half of 2014 and is expected to return to calmer waters where economic growth and expansion can really regain traction. This emphasizes that the Copper industry is finally solidifying its expected movement away from a demand-basis and more toward supply-surplus, ultimately stabilizing the previous up-and-down nature of world Copper prices throughout the first half of 2014.

Indonesian_depositsFurthermore, the London Commodity Futures Trading Commission has highlighted that global Long-positions of Futures and Forward contracts on Copper have peaked at an eight year high and have begun their descent into a predominately short-positions as world Copper supply moves into surplus, relieving excess demand and putting deflationary pressures on Copper prices. This is particularly so on the back of the news of Indonesia re-initiating their exports to major international Copper consumers such as China via Freeport-McMoRan.

Shanghai Metal Corporation stocks a wide selection of Copper-related products and raw materials for all your construction or manufacturing needs. Please take the time to browse our online catalog at: http://www.shanghaimetal.com/Copper–tpl3.html.

Zenn B.//SMC Editor

Peru Set to Explode with Copper Extraction

Peru is re-positioning themselves to catapult in front of China to take back second place in the title race for the largest Copper extraction nation in the world. Second only to Chile who produce a whopping 5.8 million tonnes of Copper annually, Peru is set to ramp up their annual Copper output capabilities by approximately double from 1.4 million tonnes in 2013, to 2.8 million tonnes before the beginning of 2016.

The expected green lights on five core Peruvian Copper mining projects underpin this massive growth aspirations and development of the Copper industry in Peru. These projects include; the US$4.6 billion expansion venture of the Cerro Verde’s which is expected to finish up at the beginning of 2016, Southern Copper’s controversial US$1 billion expansion of the Tia Maria mine which had been on hold since 2011 due to community concern for the inadequately proposed water usage and pollution management strategies has resolved these issues through a revisal of environmental management strategies which are expected to gain local approval soon, the US$3.5 billion Toromocho mine which opened last December, US$900 million expansion of Toquepala mine,  and the Chinese owned and led US$5.86 billion Las Bambas mine which is expected to shift it’s Copper output upwards from 1.3 million tonnes in 2013 to 2.8 million tonnes before 2016.

Peru_cooper_mine_GlencoreSince China is the worlds leading consumer of Copper, Peru exports approximately one quarter of their total Copper extracted to China alone. However recent events such as slowing Chinese housing growth and the Qing Dao collateral scandal have encouraged a cooling of Copper demand in China, forcing a slump in global Copper prices. Provided these current events do not have lasting effects over the next eighteen months, Peruvian Copper production levels can be expected to continue to close the gap between the Copper extraction market leaders in Chile.

Shanghai Metal Corporation stocks a wide selection of Copper-related products and raw materials for all your construction or manufacturing needs. Please take the time to browse our online catalog at: http://www.shanghaimetal.com/Copper–tpl3.html.

Zenn B.//SMC Editor

Monopolistic Concerns for the Iron Ore Market

Iron ore is a major raw material used to create steel. Therefore, demand for this raw material by the steel industry plays a major role in determining prices. Internationally, iron ore prices are largely determined by the Chinese because they are the largest consumer of iron ore in the world. China accounts for more than 60% of the seaborne iron ore trade.

iron oreThe flagging demand for iron ore from China in the wake of an economic slowdown has put downward pressure on iron ore prices. According to data from China’s National Bureau of Statistics, growth in investment, factory output and retail sales has slowed to multi-year lows in the first two months of the year. A Chinese government crackdown on polluting steel plants has forced many of them to shut down. In addition, tightening of credit by Chinese banks to steel mills that are not performing well, will negatively impact these mills’ prospects. Furthermore, the Chinese leadership has proposed structural reforms of the economy, shifting the emphasis from investment and export driven growth to services and consumption led growth. Such a transformation of the Chinese economy may negatively impact Chinese demand for steel in the long term. Chinese steel demand growth is expected to slow to 3% and 2.7% in 2014 and 2015 respectively, from 6.1% in 2013. Weak demand for steel has indirectly resulted in weak demand for iron ore as well as metallurgical coal.

553194-iron-oreOn the supply side for iron ore, expansion in production by majors such as Rio Tinto and BHP Billiton has created an oversupply situation. A combination of weak demand and oversupply is likely to result in lower iron ore prices in the near term. Lower iron ore prices will impact smaller mining companies much more than the major mining companies. It appears that the price of iron ore is being manipulated in favour of larger producers. This is due to the smaller company’s higher cost of production of per ton, as compared Rio Tinto and BHP who have lower prices. Iron ore spot prices stood at $92.74 per dry metric ton (dmt) at the end of June 2014, about 19.2% lower than a year ago. The outlook on iron ore prices remains bleak in the near term, in view of the oversupply situation.

It’s not surprising that so many Chinese producers are being forced to close up shop. According to data supplied by Bloomberg, around 80% of China’s mines have operating costs of around $80 to $90 per ton. In comparison, BHP Billiton, and Rio Tinto produce ore at around $53, $68, and $44 per ton respectively.
But it is not just BHP ramping up supply — Rio Tinto and Vale are also ramping up output, compounding the supply problem.
BHP Billiton is increasing output by 260 million to 270 million tonnes from a 217 million tonne target in 2014, and Rio Tinto is on track to produce 295 million tonnes of ore this year, up from 266 million last year.

Further reading:

http://www.forbes.com/sites/greatspeculations/2014/07/21/cliffs-earnings-preview-lower-iron-ore-and-coal-prices-will-weigh-on-results/

http://www.fool.com/investing/general/2014/07/17/heres-why-the-price-of-iron-ore-has-been-falling.aspx

Jessica R // Editor SMC