REPORT OF THE TASK FORCE AND INTERNATIONAL SUPPLY-DEMAND BALANCE

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP85-01156R000300370003-2
• Release Decision: RIFPUB
• Original Classification: S
• Document Page Count: 27
• Document Creation Date: December 21, 2016
• Document Release Date: January 30, 2009
• Sequence Number: 3
• Publication Date: May 3, 1984
• Content Type: MEMO

OFFICE OF
ASSISTANT SECRETARY
FOR INTERNATIONAL AFFAIRS
DEPARTMENT OF THE TREASURY
WASHINGTON, D.C. 20220
From: Hazen F.f ale
/ ezol
Subect: Report 6f/the Task Force
and International Supply-Demand Ralance
I am sending the revised report of the Task Force which
includes the description of a new methodology for estimating
the international supply-demand balance for strategic
minerals. The report includes a full set of computations
for chromium. The attached table to this memo shows the
summary of supply, demand, and balance for that metal.
You should note that the chromium example includes an
arbitrary demand estimate for the United States since the
final estimates of U.S. requirements have not been completed.
The other commodities cannot be completed until those
requirements are available.
As you know, political reliability has been evaluated
for ony 26 countries. I have put the unrated countries'
supplies in a separate category and have treated them as
unavailable to the United States. When reliability assess-
ments have been made, their supplies can be reallocated to
the proper category of reliability. Only a few countries
would require evaluation and their supplies are usually not
a major factor in the final balance. A list of those
countries that need to be rated is attached.
I have revised the format of the tables to make them
easier to read and understand.
The report has been revised from the earlier version
which was circulated in response to the DOD comments and
has been approved by the Task Force. The new shipping
loss estimates have been incorporated and allied demand
reflects a defense buildup in the war years.
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Chromium
(Thousand tons of Chromium)
Highly reliable
imports 2/ 229
3/
129
163
190
215
Fairly reliable
imports 2/
446
499
764
1176
Normal
48
60
60
65
70
Concerted Progra
ms -
-
2
117
237
Rest of the world
4/ 1638
1300
1203
1434
1527
U.S. 5/
271
750
750
750
750
Imbalance 6/
-211
-175
-33
0
DOD
-
-211
-175
-33
0
EC
-
0
0
0
0
BI
-
0
0
0
0
1/ Excludes Soviet Bloc, Middle East, unreliable, and
war-damaged supplies.
2/ After adjusting for foreign countries' domestic
supplies used for their own demands and deleting
shipping losses.
3/ Includes imports from all sources.
4/ Total demand less domestic production inmajor allied
countries; reflects decreased demand due to higher prices.
5/ Total demand less domestic U.S. production; preliminary
estimate and subject to change when macro study is complete.
6/ DOD imbalance based on availability of U.S. domestic
supplies and imports from highly reliable sources.
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Argentina
Colombia
Dominican Republic
Haiti
Honduras
Venezuela
Cameroons
Ghana
Kenya
Madagascar
Mozambique
Morocco
Namibia
Nigeria
Rwanda
Tunisia
Burma
Mongolia
Taiwan
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Methodology for Computing
Stockpile Goals, 1984
The determination of the imbalance between U.S. wartime
requirements and available supplies will depend to a large
extent on the supplies available from other countries. In
the 1979 stockpile study, FEMA assumed that the U.S. would
have access to the same proportion of free world supply during
wartime as it imported during the prewar period. Those initial
estimates of supplies from other countries were reduced as
appropriate for shipping losses and politically unreliable
sources.
FEMA's procedure was based on questionable assumptions
about demand in the rest of the world and about the ability of
the U.S. to gain access to foreign supplies. First, during
wartime, we could reasonably expect the U.S. to make a
determined effort to increase the quantities of materials
that would be imported well beyond its traditional shares.
This could be done by simply outbidding other importers, by
special bilateral supply arrangements or by negotiation
among allies on how to allocate supplies. Second, it is
highly unlikely that foreign demand would expand to absorb
the expected large increase in free world supplies for three
reasons: 1) Economic activity within war-zone nations would
be sharply reduced; 2) likely rates of economic growth in
other countries would not raise demand by large amounts; and
3) the increase in demand can he expected to raise prices
significantly, thereby inducing foreign consumers to forego
consumption.
The working group has adopted a new methodology which
provides more reasonable estimates of other countries' likely
demand levels due to higher economic growth and offsetting
demand reductions in those countries during wartime due to
war damage or response to sharply higher prices. Then a
comparison of this reduced demand with available world supply
would indicate the amount of supply the United States could
reasonably expect to import in the war scenario. The supplies
available would usually be substantially different for most
commodities from those estimated under the old FEMA assumptions.
The procedure for estimating the reduction in wartime
demand by non-defense sectors will not guarantee that require-
ments in foreign countries will be predicted precisely: no
procedure can do that. If foreign demands are larger than
projected, then the U.S. may have to make extra efforts to
acquire the supply by bidding for the amount available. For
other materials, foreign demand may be smaller than projected
us--2a L1
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and there will be less need for stockpiles. Although the
reductions in demand have been applied to a country's total
external demand, it is very likely that a larger burden will
fall on the less essential sectors and a smaller burden will
be borne by the defense and other essential sectors.
The attached step-by-step explanation illustrates the
working group's procedure for chromite.
outline of Procedure
The general assumptions underlying the new procedure are:
-- Initial basic (or potential) demands in the war years by
the non-communist foreign countries are estimated by
exptapolating demand from the 1982 base by the rates of
increase in U.S. GNP growth in defense and non-defense
sectors.
This initial basic demand was reduced by war damage in
war zones because reduced overall industrial capacity
would reduce demand proportionately to obtain foreign
potential net demand.
When this foreign potential net demand is added to U.S.
demands, the sum greatly exceeds the total supply
available. The shortage was assumed to be allocated by
price among all non-communist nations.
Thus, foreign potential net demand was further reduced
estimating the cutback in consumption, due to higher
prices which is necessary to equate demand with projected
supplies (reflecting substitutions and various austerity
measures). The result is foreign net demand.
This reduction in foreign demand was estimated by allocating
the total world reduction to foreign countries based on
assumed elasticities weighted by the shares of each area
in world demand.
-- The foreign supply available to the U.S. (or imported supply)
is then the difference: total available foreign free-world
supply less the foreign net demand. The difference between
U.S. requirements and total supply (U.S. domestic production
plus imports) is the imbalance to be met from the stockpile.
Adjustments for political reliability
The report by Task Force on political reliability presented
some problems in adjusting supply available.
The Task Force only evaluated 26 countries, albeit the most
important commodity suppliers. Thus, suppliers such as Iran,
Finland, Turkey, and Madagascar were not rated as to reliability.
SEC:E!
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 Of course the Soviet Bloc (including Cuba and Viet Nam) was
considered unreliable (U.R.). We decided that Finland should
be included in Eastern Europe, so its supply would be unavailable
to the West. All supplies from the middle East were considered
unavailable because that area is in the war zone. Supplies
from Zaire, Zambia, Zimbabwe, China and India were considered
unreliable according to the Task Forces, criteria, thus making
their supplies unabailable. Supplies from the group of fairly
reliable suppliers were considered available to meet all U.S.
and foreign demands except the U.S./DOD tier. Highly reliable
supplies were available to all. Supplies from unrated countries
were considered available to the rest of the world, but unreliable
for the United States. When political reliability assestments
are completed for these unrated countries, their supplies can
be reassigned. For most commodities, supplies from unrated
countries are not important enough to have a major effect on
U.S. supplies.
U11-r
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 Strategic Stockpile Goals:
Estimation of Foreign Supply and Demand
During Mobilization and War
A major consideration in determining stockpile goals for
strategic materials is the availability to the U.S. of materials
from world markets which in turn depends on demand and supply
conditions in other countries. Although the U.S. undoubtedly
could by various means gain access to a very large portion of
the total supply from allied and other friendly countries,
those countries will also need supplies of these materials to
enable effective operation of their economies. Consequently,
some method needs to be developed to determine how available
supply will be shared. This paper describes a procedure for
estimating an equitable demand reduction among countries, taking
into account a probable response to high prices, which would
then determine the supply available to meet U.S. needs.
The general procedure is to adjust the Bureau of Mines' world
production estimates in (table A) to exclude Soviet Bloc supplies,
politically unreliable supples, loss of supplies in war zones, and
shipping losses.
Estimated consumption in the U.S. will come from the domestic
requirements task group. These estimates reflect price/scarcity
induced substitutions and austerity; all U.S. requirements will
be met from imports, stockpiles, or domestic production. The
potential consumption in war time for the major allies (in
table B) is estimated by extrapolating the 1982 consumption
by the rate of growth in GNP for the defense and non-defense
sectors. For other countries, demand in the war period has
been set at the pre-war peak. The latter is adjusted to
exclude lost demand due to war damage in certain war zones.
Domestic supply in each country is deducted from this demand
estimate to obtain an estimate of each country's external
demand on the supply in the rest of the world. This external
demand estimate is further reduced, in response to high
prices. This last calculation is critical in determining
how the burden of adjusting to the supply constraint is
spread among the U.S. and other non-communist consumers. In
general, it is assumed that the burden is shared in proportion
to weighted elasticities among the.U.S. and foreign nations.
Finally, the quantity available to the U.S. from allies and
other non-communist areas is the difference between the supply
and demand estimates for ROW shown in tables C and D.
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u uiiU
Supply estimates (table A) were developed for each major
producer and for the world by the bureau of Mines. These
represent capacity that could he Drought on stream at signifi-
cantly higher prices (about 50% over 1978-R2 average prices for
common materials). Production is the only source of supply;
commercial stock drawdowns have been ignored here but they might
be an important source in the U.S. for some materials, especially
in the early stages of war. The added supply that could he
generated in the U.S. due to extraordinary measures is shown
in table D as a separate source of U.S. supply, presumably
dedicated to defense requirements.
In estimating availabilities to the U.S. and the rest of the
world (ROW), the supply estimates were adjusted to exclude produc-
tion by the Soviet bloc (including Cuba and Viet Nam) and Eastern
Europe, since those supplies would not he available to the West.
Also, supplies from the Mid East and other war zones were deducted.
U.S. supplies were assumed to be unavailable to the rest of the
world only if they exceeded U.S. demands.
Political reliability. World supplies are further reduced to
exclude those supplies which would probably not he available to
western countries during war time. The Task Force on Reliability
determined supplies from Zaire, Zambia, Zimbabwe, China and India
should not be counted on to meet U.S. requirements. We have
assumed they also cannot be counted on to meet other countries'
needs.
Supplies from those countries which are rated highly reliable
(including major allies) and fairly reliable plus those from
unrated countries make up the pool of supplies available to satisfy
external demand of non-communist countries. Only high reliable
supplies will be considered available for U.S. direct defense needs.
Shipping losses. These were deducted from the total in deter-
mining the supply available to the U.S. and ROW. They are consistent
with estimates used by other task groups. The assumption is that
shipping losses will average 0.5% in the first war year, 0.1% in
the second year, and no losses in the third year. There is no
differentiation of shipping losses from available supplies destined
for the U.S. as opposed to ROW. Canada's supplies were assumed
to suffer no shipping loss.
Energy availability and international trade considerations.
No adjustments were made to supply to cover the possibility of
curtailed output because of energy shortages or inadequate
shipping capacity. It is assumed that mineral production would
get an allocation of oil or other energy sources sufficient to
maintain output at capacity levels and that adequate shipping
would be available to transport the materials from sources of
supply to the markets.
rt P. F..
c irr
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Demand estimates (table B). Potential demand for each major
allied country in the war period has been projected from the 1982
base year based on the growth rates in U.S. defense and non-defense
sectors of the GNP accounts. The projection factors are described
in more detail in part E. For other countries (mainly LDCs),
consumption in the war years was set at prewar peaks.
Domestic supplies have been deducted from each ally's
consumption under the presumption that they will be used first
in meeting that country's needs, thus reducing external demands
on supplies from the rest of the world.
War damage to demand is an estimate of reduced demand in
certain countries because of damage to industries from military
activities in the war zones. Industrial capacity is presumed to
be completely cut off in some countries in some years and
reduced significantly in others. The proportional reductions
are the same for all materials and roughly consistent with the
estimates for individual materials could not be made because
necessary information is not readily available.
Net demand -- after war damage and unreliable supplies are
deducted -- reflects the amount of material that would be
consumed at the base period price if the supply were available.
Next domestic supply was deducted from this demand in the U.S.
and major allies to obtain external demand which was combined
with the total demand by "other countries."
Since supply in the rest of the world will usually be less
than this external demand, price will have to rise to ration
the supply. The necessary cutback in demand is the difference
between the supply available to the U.S. and ROW and the net
demand after war damage. This difference is shown in the line
item "supply less demand."
Demand impact is an estimate of the reduction in demand in
response to thigh prices that are expected to accompany the high
demand and limited supply situation during wartime. The following
illustrates the procedure:
Weighted elasticities were used to develop a percentage
distribution of the demand reduction among major areas (U.S.
major allies, and other non communist countries) to bring
consumption into balance with available supplies. Price
elasticities for each of these areas were assumed to be -0.2,
-0.2, and -0.4 respectively and the weights were the external
demands described above. In the example below, about 38
percent of the reduction was allocated to major allies and
33 percent to "other countries," the remainder would be
accounted for by the U.S., primarily by the non essential
civilian sector.
SEC. ET
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.
-4-
Distribution
of external
Weighted
Elasticities
demand,
chrome
elasticities
Thous.
Tons
%
%
U.S.
-.2
750
34
0.69
29
Other
allies
-.2
989
46
0.91
38
Other
non communist
-.4
431
20
0.80
33
The assumed elasticities are critical to the sharing of the
burden of demand reduction because the selection will determine
whether the U.S. bears the full burden (when non-U.S. elasticities
are zero) or none of it (when the U.S. elasticity is zero). The
procedure used in table B uses an elasticity of -0.2 for the U.S.
and its allies and -0.4 for other non-communist consumers.
a. The U.S. demand elasticity (-0.2) was assumed
to he quite low because the U.S. demand require-
ments derived from the macro analysis will already
reflect the response to higher prices, considerable
substitution, and explicit conservation efforts.
h. Elasticities for our major industrial allies are
also assumed to be low (-0.2) since they will need
to fulfill some defense needs and their elasti-
cities for strategic materials for nondefense
needs are similar to those of the United States.
c. Elasticities for other foreign countries (-0.4)
were assumed to be double those for the U.S. and
for major industrial allies. Those countries
were judged to be more flexible in cutting back
consumption when prices rise.
It should be noted that the ratios of the elasticities are
the important elements in the allocation of the demand reduction.
The absolute elasticities are important in determining the
necessary increase in price, a step which has been omitted here.
Net external demand on ROW supplies. This estimate is
derived by deducting the foreign demand reduction from net demand
after war damage. This includes U.S. demands plus those from
allies and other non-communist areas. This total overstates
actual demand because U.S. imports will be smaller by the amount
of withdrawals from its stockpiles or commercial inventories.
SEGEET
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JLIaYiLI
Finally, the supply-demand balance (table C) in ROW is
simply the excess or ROW supplies over ROW demand. This balance
(from highly reliable, fairly reliable and major allies) is the
amount available for U.S. imports. These imports together with
U.S. production will be used to meet the U.S. war time defense,
essential civilian, and industrial requirements. Any remaining
imbalance would be met from stockpiled materials. Note that
only highly reliable imports would he used to meet U.S. direct
defense requirments.
S n- T
~.AL.
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U e..3l i'El
Supply and Demand for Chromium
(Thousand tons)
Part A
SUPPLY 1/
Soviet bloc + EE (Group 1)
1191
1221
1445
1645
1947
2248
Group 4 (Mid East)
175
156
235
235
246
262
Group 2 (Unreliable)
220
192
495
495
580
690
Group 7 (Not rated)
57
33
70
70
76
83
Group 5 (Fairly reliable)
1125
731
1500
1500
2000
2500
Group 6 (Highly reliable)
241
221
305
305
321
336
FRG*
Group 3 (other WE)*
Canada
Australia
Japan*
Korea*
United States
53
48
60
60
65
70
Total supply
3077
2618
4132
4332
5259
6215
Reliable supply
less war damage* 2/
Fairly reliable (Gr. 5)
1125
731
1500
1500
2000
2500
Highly reliable (Gr. 6)
241
221
305
305
321
336
FRG
Group 3
Canada
Australia
Japan
Korea
United States
53
48
60
60
65
70
Group 7
57
33
70
70
76
83
Total
1491
1049
1957
1954
2484
3014
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ult
Supply and Demand for Chromium
(Thousand tons)
Part A
SUPPLY
Less domestic demand 3/
FRG
298
197
197
0
0
49
Group 3
615
742
742
641
656
694
Canada
28
8
8
8
8
8
Australia
17
8
8
8
8
9
Japan
471
387
382
351
352
359
Korea
6
3
3
3
3
3
U.S.
532
271
810
810
810
810
Net supply for export 3/
Group 5
1125
731
1500
1500
2000
2500
Group 6
241
221
305
305
321
336
Group 7
57
33
70
70
76
83
FRG
0
0
0
0
0
0
Group 3
0
0
0
0
0
0
Canada
0
0
0
0
0
0
Australia
0
0
0
0
0
0
Japan
o
0
0
0
0
0
Korea
0
0
0
0
0
0
U.S.
0
0
0
0
0
0
Total
1423
Q85
1875
1875
2397
2919
Less shipping loss 4/
Group 5 (.5, .1, U)
Group 6
2
1
0
Group 7
0
0
0
Australia & N.2.
0
0
0
Japan
0
0
0
Korea
0
0
0
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v.. U I t.I
Supply and Demand for Chromium
(Thousand tons)
Part A
SUPPLY
a. Rest of world (ROW)
Fairly reliable (Grp. 5) 1125
731
1500
1492
1998
2500
Highly reliable (Grp. 6) 241
221
305
303
320
336
b. Major allies
FRG
0
0
0
0
Group 3
0
0
0
0
Canada -
-
0
0
0
0
Australia
n
0
0
0
Japan -
-
0
0
0
0
Korea -
-
0
0
0
0
Total
0
0
0
0
c. Group 7 57
33
70
70
76
83
d. U.S.
0
0
U
0
Percent distribution
Group 5
80.0
83.7
85.6
Group 6
16.2
13.4
11.5
Group 7
3.8
2.9
2.8
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OLUjiLt
1/ Supply estimates are derived from Bureau of Mines capacity
numbers based on substantial increase in prices during war
years: 1984, 1985, and 1986; the warning year is 1983. The
country groupings are based on the categories shown in Part E
as follows: Group 1, Soviet Bloc (including Cuba, Vietnam,
and No. Korea) and Eastern Europe; Group 2, politically
unreliable suppliers, Group 3, Western Europe excluding FRG;
Group 4, Middle East; Group 5, fairly reliable suppliers;
Group 6, highly reliable suppliers; Group 7, suppliers not
rated as to political reliability; the itemized countries
(Canada, Australia, FRG, Japan, Korea) are not included in
any of the above groups; together with Group 3, they will be
referred to as major allies.
2/ Excludes Group 1, 4, 2, and war damage to those areas marked
by (*). Deductions for war damage are as follows: FRG, 100%
in 1984 and 1985, 75% in 1986; Group 3, 15% in 1984 13% in
1985 and 8% in 1986; Japan and Korea, 7% in 1984, 6% in 1985,
and 5% in 1986.
3/ Domestic demand in major allied countries is deducted from
the countries' supplies to determine the amount available for
export. Domestic demand for each is estimated in Part B and
includes adjustment for war damage losses. If domestic
demand exceeds domestic supply, then the net supply available
for export is set at zero.
4/ Deductions for shipping losses are based on the shipping Task
Force's report and are applied uniformly across all countries
(except Canada) and all commodities 0.5% for 1984; 0.1% in
1985; and 0 in 1986. Canada was assumed to have no shipping
losses.
5/ Net deliverable supply is the supply available to meet the
external demand from the U.S. and major allies plus total
demand from other non-communist countries.
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Supply and Demand for Chromium
(Thousand tons)
Part B
DEMAND
World demand 1/
Soviet Bloc
FRG
Group 3 (Other Fast Eur.)
Canada
Australia
Japan
Korea
All other (BOW)
Total, exc. Soviets
U.S.
Grand Total, exc. Soviets
568
298
615
28
17
471
6
431
1866
532
2298
2966
687
197
742
8
8
387
3
309
1654
271
1925
2612
NA
197
742
8
8
382
3
431
1771
81n
2581
NA
NA
0
641
8
8
351
3
431
1442
810
2252
NA
NA
0
656
8
8
352
3
431
1458
815
2273
NA
NA
49
694
8
9
359
3
431
1553
820
2373
NA
Less domestic supply 2/
FRG
Group 3
Canada
Australia
Japan
Korea
U.S.
External Demand ROW supply 2/
FRG
197
197
0
0
49
Group 3
731
727
626
640
677
Canada
8
8
8
8
8
Australia
8
8
8
8
9
Japan
382
375
344
344
350
Korea
3
3
3
3
3
Total major allies
1329
1318
989
1003
1096
Other, RCt4
309
431
431
431
431
U.S.
271
750
750
750
750
DOD
-
340
340
340
340
EC
-
200
200
200
200
I
-
150
150
150
150
All other
-
60
60
60
60
Total external demand
1909
2499
2170
2184
2277
OFCal Lr
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OLUiiLI
Part 8
DEMAND
Supply and Demand for Chromiurn
(Thousand tons)
Net deliverable supply 3/
Fairly reliable
1500
1492
1998
2500
Highly reliable
305
303
320
336
Major allies
0
0
0
0
Group 7
70
70
70
83
U.S.
o
0
0
0
Total
1875
1865
23R8
2919
Supply less demand 4/
-624
-305
+204
+642
Percent reduction
-25.0
-14.1
-
-
Demand reductions 4/
Major allies
237
116
-
-
ROW
206
101
-
-
Total
443
217
-
-
Net external demand on ROW 5/
Major allies
1081
873
1003
1096
ROW
U.S.
DOD
219
340
330
340
431
340
431
340
EC
200
200
200
201)
I
Other
150
60
150
60
150
60
150
6U
Total
750
750
750
750
SECRET
 Approved For Release 2009/01/30 : CIA-RDP85-01156R000300370003-2
1/ Demand for specific geographic areas during 1983-86 was estimated
as follows:
-- FRG, other western Europe, Canada, Australia, Japan and Korea
extrapolated from 1982 based on rate of growth in GNP for the
United States. See part F for detailed estimates.
-- U.S., derived from macro economic task group report.
-- All other, peak demand in the prewar years (usually 1980) was
used in all war years.
2/ Domestic supply was deducted to arrive at the countries' demands
on supply from the rest of the world. No deduction was made for
"all other". If domestic supply exceeds domestic demand, then
external demand is set at zero.
3/ Net deliverable supply is from Part A.
4/ Supply less demand is the excess demand that must he eliminated
to bring about a balance in world supply and demand. Major
consuming areas will share the burden of reduction by foregoing
consumption at higher prices in proportion to their weighted
price elasticities as computed in Part G. The elasticities were
-0.2 for the U.S. and major allies, and -0.4 for all other foreign
consumers; the weights were the external demand quantities computed
under 2/ above.
5/ Net external demand is the residual demand for each area on the
rest of the world (mainly LDCs) after deducting the negative
response to higher prices. It also reflects the use of domestic
supplies in the major allied countries to meet part of their own
requirements.
SECRET
 0
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 Approved For Release 2009/01/30 : CIA-RDP85-01156R000300370003-2
Uuii_
Part C -- Foreign Supply Available
1/ Estimation of supply available from the rest of the world to
meet the external demand of the U.S., major allies, and other
non-communist countries. The balance remaining after the
rest of the world's demands have been met would be available
for import by the U.S. Group 5 are fairly reliable suppliers;
Group 6, highly reliable; and Group 7, not rated.
2/ From Part A, Supply. Supplies from major allies and the U.S.
are the supplies remaining after deducting domestic require-
ments. The percentages represent the distribution of total
supply by origin; these percentages will be used below to
compute the amount of supply from each origin which will go
to major allies.
3/ The percentage mentioned in 2/ have been applied to major
allies' total demand to determine the origin of the supply
to meet their external demand.
4/ The amount of supply by origin to meet the rest of the world
demand was computed as a residual: (1) the remainder from
Group 7 (not rated) after deducting the supply taken by major
allies, went entirely to ROW (mainly LDCs); (2) next, the
remaining ROW demand was filled by Group 5, to the extent
available; (3) any remaining ROW demand would be taken on a
proportional basis from Group 6, major allies, and the U.S.
5/ Net available to the U.S. is the remaining deliverable supply
(see 2/ above) after demand by major allies and ROW have been
met (see 3/ and 4/).
SEG.:'"[
 Approved For Release 2009/01/30 : CIA-RDP85-01156R000300370003-2
1: iiLI
Supply and Demand for Chromium
(Thousand tons)
Part D
U.S. balance 1/
Net available to U.S. 2/
U.S. Production
60
60
65
70
USCP
0
2
117
237
Major allies
0
0
0
0
Group 6
129
163
190
215
Group 5
446
499
764
1176
Group 7
0
0
0
0
Total
635
724
1136
1698
U.S. requirements 3/
DOD
400
400
405
410
EC
200
200
200
200
I
150
150
150
150
All
other
60
60
60
60
Total 810
810
815
820
Imbalance 4/
DOD
-211
-175
-33
0 (+112)
EC
0 (+246)
0 (+299)
0 (+564)
0 (+1098)
I
0 (+96)
0 (+149)
0 (+414)
0 (+948)
r',o?
LUuLi
 Approved For Release 2009/01/30 : CIA-RDP85-01156R000300370003-2
SEu i
1/ The net deficits remaining after available U.S. production
and imports have been used to meet U.S. requirements.
2/ From Part C. USCP is the production under a concerted
program.
3/ From the domestic requirements task group.
4/ Computed separately for each tier. DOD requirement can be
satisfied only from U.S. production, USCP, major allies, and
Group 6 (highly reliable suppliers). The EC (essential
civilian) tier requirements are satisfied by any remaining
supply from U.S. production, major allies and Group 6, and
additional supplies from Group 5. The I (industrial) tier is
satisfied by any remaining supply from U.S. production, major
allies, Group 6, and Group 5. The "all other" tier is not
considered to have a deficit; it would compete with the rest
of the world for available supplies.
SEG[E r
 Approved For Release 2009/01/30 : CIA-RDP85-01156R000300370003-2
Group 1
Soviet Bloc and
Eastern Europe
Cuba
North Korea
Viet Nam
Laos
Albania
Bulgaria
Czechoslovakia
Finland
Germany, Democratic R.
Hungary
Poland
Romania
USSR
Yugoslavia
Group 4
Middle East
Afghanistan
Bahrain
Egypt
Iran
Iraq
Israel
Jordan
Kuwait
Lebanon
Oman
Pakistan
Qatar
Saudia Arabia
Syria
Turkey
United Arab Emirates
Yemen Arab Republic
Zaire
Zambia
Zimbabwe
China
India
Other Western Europe
(excl. W. Germany)
Austria
Belgium
Denmark
France
Greece
Iceland
Ireland
Italy
Lumxemburg
Malta
Netherlands
Norway
Portugal
Spain
Sweden
Switzerland
United Kingdom
Holiv ia
Chile
Guyana
Peru
Rostwana
So. Africa
Sri Lanka
Brazil
Jamaica
Mexico
Surinam
Gabon
Guinea
Indonesia
Malaysia
New Caledonia
Philippines
Thailand
Approved For Release 2009/01/30 : CIA-RDP85-01156R000300370003-2
Argentina
Bahamas
Barbados
Colombia
Costa Rica
Dominican Republic
Ecuador
El Salvador
Guatemala
Haiti
Honduras
Nicaragua
Panama
Paraguay
Surmame
Trinidad Tobago
Uruguay
Venezuela
Algeria
Angola
Benin
Cameroon
Central African Red.
Chad
Congo
Cyprus
Djibouti
Equatorial Guinea
Gambia
Ghana
Guinea-Bissau
Ivory Coast
Kenya
Lesotho
Liberia
Libya
Madagascar
Malawi
Mali
Mauritania
Morocco
Mozambique
Namibia
Niger
Nigeria
Reunion
Rwanda
 Approved For Release 2009/01/30 : CIA-RDP85-01156R000300370003-2
Sao Tome/Principe
Senegal
Seychelles
Sierra Leone
Somalia
Sudan
Swaziland
Tanzanaia
Togo
Tunisia
Uganda
Upper Volta
Bangladesh
Brunei
Burma
Fiji
Hong Kong
Kiribati
Mongolia
Nepal
Singapore
Taiwan
Other, not specified
Canada
Australia
New Zealand
Japan
Korea
FRG
Group 9
USA (primary secondary)
Grand total
SEC .E
 n~-e nrw
Approved For Release 2009/01/30 : CIA-RDP85-01156R000300370003-2
Supply-Demand for Minerals
Part F: Procedure for estimating basic foreign wartime demand.
1. Estimate the proportion of GNP allocated to defense and .all
other" in 1982, based on OECD data, as follows:
Japan: defense, 0.85%; all other, 99.15%.
Australia: defense, 2.60%; all other, 97.40%.
Canada: defense 1.65%, all other, 98.65%.
FRG: defense, 2.80%; all other, 97.20%.
Other Western Europe: defense, 2.75%; all other 97.25%.
Korea: defense, 6.00%; all other 94.00% (estimate by
desk officer).
Note that the "Other Western Europe" estimate reflects a
central tendency for all countries other than Germany; esti-
mates of the portion of GNP allocated to defense for these
major countries in this group ranged from a low of 1.7% for
Spain and Italy to 3.0% for Sweden and 4.5% for the U.K.
As a point of reference, the U.S. devoted about 5.4% of GNP to
defense in 1982 according to the estimates generated by the
Macroeconomic Task Group.
2. These 1982 percentages were extrapolated to 1986 and the
intervening years by the rates of growth in U.S. defense and
all other sectors:
GNP (51972, bil)
1485
1510
1592
1683
1744
Defense 11
80
131
246
310
338
All other "
1405
1379
1346
1373
1406
Defense/GNP (%)
5.40
8.68
15.45
18.42
19.38
Growth rates
Total GNP (8)
-
+1.68
+5.43
+5.72
+3.62
Defense
-
+63.75
+87.79
+26.02
+9.03
All other
-
-1.85
-2.39
+2.01
+2.40
Japan
Total GNP (8)
100.00
98.71
90.77
91.74
92.72
Defense
.85
1.39
2.43
2.45
2.48
All other
99.15
97.32
88.34
89.29
90.24
Growth in GNP (B)
-
-1.29
-9.00
+1.07
+1.07
S[cP`'r
Approved For Release 2009/01/30 : CIA-RDP85-01156R000300370003-2
 'r.S
Approved For Release 2009/01/30 : CIA-RDP85-01156R000300370003-2
Australia
Total GNP (%)
100.00
99.86
101.31
105.27
108.46
Defense
2.60
4.26
8.00
10.08
10.99
All other "
97.40
95.60
93.31
95.19
97.47
Growth in GNP (%)
-
-.14
+1.45
+3.91
+3.03
Canada
Total GNP (%)
100.00
99.23
99.29
102.50
105.39
Defense
1.65
2.70
5.07
6.39
6.97
All other
98.35
96.53
94.22
96.11
98.42
Growth in GNP (%)
-
-0.77
+.06
+3.23
+2.82
Germany
Total GNP (%)
100.00
100.00
0
0
25.00
Defense
2.80
4.59
0
0
1.15
All other
97.20
95.41
0
0
23.85
Growth in GNP (%)
-
0
-100.00
-
N.A.
Other Western Europe
Total GNP (%)
100.00
99.95
86.38
88.42
93.50
Defense
2.75
4.50
7.19
7.36
7.78
All other
97.25
95.45
79.19
81.06
85.72
Growth in GNP (%)
-
-.05
-13.58
+2.36
+5.74
Korea
Total GNP (%)
100.00
102.79
100.91
102.00
103.09
Defense
6.00
9.83
17.16
17.34
17.53
All other
94.00
92.96
83.75
84.66
85.56
Growth in GNP (%)
-
+2.79
-1.83
+1.08
+1.07
Note that the war damage adjustments were applied in 1984,
1985, and 1986 to Japan and Korea (-7%, -6%, -5%), Western
Europe (-15%, -13%, -8%), and Germany (-100%, -100%, and -75%).
The percentage reductions were applied to the 1984 extrapolated
estimate (1983 for Germany); thus the only growth in those
countries in 1985 and 1986 comes from partial repair of the war
damage.
The percentage increases in GNP derived above will be
applied to 1982 demand for each commodity for each country or
area to obtain demand for the particular commodity (adjusted for
war damage) for the warning year and the 3 war years for that
country.
S Gf)T
 Approved For Release 2009/01/30 : CIA-RDP85-01156R000300370003-2
dLt~lt~t
Supply-Demand for Chromium
Part G: Weighted
Elasticities
Elasticity
External
Demand
wtd
Elas.
8
Tons
%
-0.2
750
34.5
.0688
29
-0.2
989
45.6
.0912
38
Other rest of world
-0.4
431
19.9
.0796
33
(ROW)
2710
1110.0
.2396
100
SEU~LT
Approved For Release 2009/01/30 : CIA-RDP85-01156R000300370003-2