Page 50 - Chemical process engineering design and economics

36 Chapter 2

DIRECT COSTS

Raw Materials

Sometimes raw material cost will dominate the production cost. A chemical com-
pany will attempt to protect its source of supply by arranging long term contracts,
which also benefits the supplier. Raw material prices for preliminary estimates
may be obtained from the sources listed in Table 2.2. Prices of chemicals depend
on the quantity purchased. Published prices tend to be high, particularly, for Al-
drich, Alfa Inorganic, and Fisher who sell small quantities of many chemicals for
research. The most accurate source is the Chemical Marketing Reporter, which
publishes prices for chemicals sold in bulk.

Catalysts

Catalysts are lost because of abrasion during use and regeneration. Also, some
catalysts are eventually spent and must be replaced. Thus, the cost of catalysts
must be included in the production cost. There are several corporations that spe-
cialize in manufacturing catalysts where the cost of catalysts may be obtained.

Solvents

Solvents are used in separation processes, such as in solvent extraction and gas
absorption, and in liquid-phase reactions. The solvents are usually recovered
within the process and reused, but losses occur because of leaks, incomplete re-
covery, and degradation. Leaks, however, are strictly regulated by the Environ-
mental Protection Agency (EPA).

Utilities
Utilities include steam, electricity, fuel, cooling water, process water, compressed
air, refrigeration, and waste treatment. Utility equipment is usually located outside
of the process area and may supply several processes. We may consider each util-
ity as a product, and estimate its cost according to the procedure outlined in Table
2.1. The cost of steam, electricity, and refrigeration depends mainly on fuel costs.
Local utilities may give electric power costs, and the Federal Power Commission
publishes rates for all public utilities in the United States. Table 2.3 lists approxi-
mate utility rates.

Copyright © 2003 by Taylor & Francis Group LLC