Friday, September 4, 2009

Does the United States Need More Ore?

I'm actually asking.

Superman #691 by James Robinson and Renato Guedes (2009)

The President of the DC Universe United States is about to sign a free-trade agreement with the nation of Markovia, it seems primarily because of an interest in its ore reserves.

Particularly with iron more, the United States uses most of its stock to produce steel, though this is pretty much true throughout the world. The United States Geological Survey estimates that in 2004 there were more than 800 billion tons of crude ore throughout the world, with 230 billion or so containing iron. The U.S. had about 110 billion crude ore, with about 27 billion tons of iron. They accounted for about 4% of the world's iron ore output and 5% of consumption.

Regarding imports and exports, according to the International Trade Centre, the U.S. accounted for about $611 million in iron ore imports, which is about 1.5% of the world's total. This ranked it number 11 in imports in 2005. It exported about $580 million.
What does this actually mean for whether the United States actually needs more? Steel production is cheaper in foreign countries, so in tough times the United States has been importing more steel from Canada and Brazil.

Furthermore, China's demand for ore has been rapidly growing in recent years, accounting for an astonishing 45% of imports. This has had a considerable effect on ore exports not only in the U.S., but also in Brazil and Australia, who continued to invest large amounts of funds towards increasing production. Taking a look at the ITC data for exports, we can see that from 2001 to 2003, the United States had maintained about $230 - $250 million in iron ore exports. Then in 2004, exports rose to $337 million, and shot up again in 2005 to about $580 million.

Of course, imports also significantly increased in 2005 from 2004, going from $451 million to $611 million.

I wonder if there's another reason the United States is so passionately interested in Markovia. Any ideas?

23 comments:

Erik said...

Perhaps the excessive construction in the comic book world has led to an increased U.S. Demand for ore. Iron and Steel might be much more valuable commodities in a universe where large numbers of tall buildings are destroyed every year.

HWH said...

Why can't the US just spawn more overlords?

HWH said...

Sorry, that was a stupid comment. What I should've said was that we need to acquire more Vespian Gas. Duh.

ShadowBanker said...

Erik - But if it's cheap to import steel, why not just do that?

HWH - MY LIFE FOR AIUR!

Wise Bass said...

My guess is that Markovia has Element X (a room-temperature superconductor)buried deep under a supply of heavy oil the size of Saudi Arabia's Ghawar field, next to a massive uranium mine. Oh, and Markovia is situated right in the middle of a bunch of feuding states, meaning it offers a prime site for military basing.

Erik said...

Part of my point is that steel might not be as cheap in the DC universe due to increased demand. But if you're trying to say you don't understand why we'd import ore to turn to steel in America, when we could import finished steel from a country with lower labor costs, imagine the following scenario.

The Markovian government has huge tariffs, business laws hostile to non-native companies, and poor infrastructure for the construction of steel. The trade deal could remove the tariffs, allowing American based companies to purchase the ore to be shipped to factories they own in a county with low labor costs, where it could be converted to steel before being sold in America or other industrialized supervillian heavy countries.

Another option would be to simply pave the way for American countries to come in to Markovia and build the steel factories, and thus control the exported steel. With all the profits coming back to American stockholders.

If steel as a commodity is in high demand, and Markovia controls a significant share of the ore in the world, Then this deal could benefit the American economy even if none of the ore actually comes to America.

ShadowBanker said...

Wise Bass - Do you really think the United States is interested in military basing? I wonder how much is even spent on the military -- we've got Superman!

Erik - Amazing points, particularly about American factories in Markovia. In fact, I remember reading an article somewhere (I'll link it if I find it) about American steel producers looking to expand to Europe for better market conditions.

Do you think politics come into play at all? I mean, if it's not American steel, it's not worth it right?

Alec said...

I would add to Erik's point that, not only do a city's buildings get demolished more often, but there are a whole lot more cities in the DC universe. All the real cities exist, but then you have to add in several major fictional metro areas (Metropolis, Gotham, Keystone, etc). DC USA is, at the very least, significantly more urbanized and likely has a much higher population (and infrastructure needs) than the real USA.

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