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What is "Limited Demand"?

12/11/2010 12:51 PM

I recently participated in a meeting attended by Representatives of a large coal mining company, the Federal Mine Safety and Health Administration and the Bureau of Mines, State of Pennsylvania. The meeting was called by the mining company in order to determine what would be required to change laws requiring the use of heavy-duty double jacketed portable electrical cable (commonly termed "Drill Cord).The intent of the mine was to be allowed to use "SO" type cable. This intent was directed partially by cost, but the primary reason was the difficulty in securing a dependable supply of the required "Drill Cord".

It has been my experience, that the difficulty in obtaining this particular cable is very real. The reason given by cable manufacturers for this is the limited demand for this particular cable, whereby this cable has a limited production run.

The mining company involved in this meeting, estimated a cost of three million dollars for the amount of cable they would use.

My questions are: What constitutes "limited demand" in the cable industry and is this why manufacturing is going away here in the U.S.?

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#1

Re: What is "Limited Demand"?

12/11/2010 1:20 PM

Three million dollars of retail sales won't amount to much if the cable company does 300 million dollars worth of business in other areas.

It's all relative. And it doesn't matter. Make lemonade.

The question is, will it kill more people?

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#2

Re: What is "Limited Demand"?

12/11/2010 2:34 PM

I declare this thread dead.....

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#4
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Re: What is "Limited Demand"?

12/12/2010 12:04 AM

why?

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#5
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Re: What is "Limited Demand"?

12/12/2010 9:43 AM

Because I have been brought to the realization that although the three million dollar figure represents but one mine, it is apparently unsubstantial and thus answers my question.

I tried to post this in the Wire and Cable blog, but the category does not appear after composition, as an option.

I do wonder what amount of money would motivate a Chinese manufacturer and whether or not this situation is a result of market manipulation.

By the way, The CSA regulations (shielded double jacketed) present yet another set of marketing and application peculiarities.

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#6
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Re: What is "Limited Demand"?

12/12/2010 11:03 AM

I would suspect that there are other market forces at play...

3 million dollars is a huge amount of money in todays economy, and perhaps there are few manufacturers aware of the need? Is the construction methodology patented or controlled by a single manufacturer? High demand creates higher prices. If anyone can control the supply....

... probably just my Conspiracy Chip 4270 over producing...

chris

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#7
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Re: What is "Limited Demand"?

12/12/2010 11:23 AM

There are indeed other "forces".

My opinion, is that a product required for compliance, should not be "manipulated". I suppose this is a reality, but these types of realities are what is wrong.

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#8
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Re: What is "Limited Demand"?

12/12/2010 11:43 AM

I don't know.

it seems to be a complex international market. Whether there are competitive reasons, or material shortage reasons, or environmental reasons, or governance reasons or technological reasons..... its hard to say.

I think that regardless of the reasons, if the mine were to increase its marketing of its need, that perhaps some auxiliary manufacturer would be able to fulfil that need?

chris

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#9
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Re: What is "Limited Demand"?

12/12/2010 4:42 PM

Chris,

The construction/composition of this cable was determined as necessary years ago, due to the mine environment. It may be that modern methods of construction would meet these requirements for durability, but the only way they would be permissible, in the case of MSHA for example, would be an act of Congress (literally).

Thanks for the comprehensive link.

Mark

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#10
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Re: What is "Limited Demand"?

12/12/2010 6:02 PM

But is that "one mine", one of many?

If the many wish relaxation of a 'economically punitive regulation', they are not going to send in the biggest player, or go as a visible consortium.

However; $3 mil US wouldn't fall into "can't be bothered" in China.

My 2¢

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#3

Re: What is "Limited Demand"?

12/11/2010 3:06 PM

Regulatory overkill vs personnel overkill....

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