Blog

Researchers at the US Department of Energy’s Pacific Northwest National Laboratory believe that they may have stumbled on a way to make zinc-manganese batteries a viable option for energy storage. Whereas previous studies consistently showed that zinc-manganese batteries have a short life span, quickly losing their ability to recharge, the new study shows that these batteries can be modified to have much better recharging rates.

Publishing their findings in the journal ’Nature Energy‘ PNNL Laboratory Fellow Jun Liu said that, “The idea of a rechargeable zinc-manganese battery isn’t new; researchers have been studying them as an inexpensive, safe alternative to lithium-ion batteries since the late 1990s. But these batteries usually stop working after just a few charges. Our research suggests these failures could have occurred because we failed to control chemical equilibrium in rechargeable zinc-manganese energy storage systems.”

Battery Breakthrough

There has always been interest around rechargeable zinc-manganese batteries because both components (zinc and manganese) are relatively cheap and yet the battery can have an energy density similar to lead-acid batteries.

By building their own battery with “…a negative zinc electrode, a positive manganese dioxide electrode and a water-based electrolyte in between the two” the research team saw how the battery quickly failed to recharge to its original energy capacity. They then began to analyse the battery to discover why.

As the online journal ‘Science Daily‘ explains, “To find out, they first performed a detailed chemical and structural analysis of the electrolyte and electrode materials. They were surprised not to find evidence of zinc interacting with manganese oxide during the battery’s charge and discharge processes, as they had initially expected would happen. The unexpected finding led them to wonder if the battery didn’t undergo a simple intercalation process as they had previously thought. Perhaps the zinc-manganese battery is less like a lithium-ion battery and more like the traditional lead-acid battery, which also relies on chemical conversion reactions.”

By examining the electrodes in greater detail they found that, “…[the] manganese oxide was reversibly reacting with protons from the water-based electrolyte, which created a new material, zinc hydroxyl sulfate.

Typically, zinc-manganese oxide batteries significantly lose storage capacity after just a few cycles. This happens because manganese from the battery’s positive electrode begins to sluff off, making the battery’s active material inaccessible for energy storage. But after some manganese dissolves into the electrolyte, the battery gradually stabilizes and the storage capacity levels out, though at a much lower level.”

A New Battery Product

With a greater understanding of the process inside zinc-manganese batteries the team looked at ways to limit the rate of manganese sluff off.

As a report by Pacific Northwest National Laboratory acknowledges, “Knowing the battery underwent chemical conversions, they determined the rate of manganese dissolution could be slowed down by increasing the electrolyte’s initial manganese concentration.

So they added manganese ions to the electrolyte in a new test battery and put the revised battery through another round of tests. This time around, the test battery was able to reach a storage capacity of285 milliAmpere-hours per gram of manganese oxide over 5,000 cycles, while retaining 92 percent of its initial storage capacity.”

Whilst it is still too early to say in exactly what fields zinc-manganese batteries would be most suitable (the research was published on 18^th April 2016), it has already caught the attention of battery manufacturers. Chemical traders have also shown an interest for the added value it may provide to suppliers of zinc and manganese, especially given the growing need for large-scale energy storage in a power hungry world.

As Liu himself noted when he said, “As a result [of our team’s discovery], zinc-manganese oxide batteries could be a more viable solution for large-scale energy storage than the lithium-ion and lead-acid batteries used to support the grid today.”

All retailers know the power of the ‘99 cent’ sales tag and most B2C traders use it.

According to a report in the academic journal, ‘Marketing Bulletin‘, entitled, ‘The Widespread Use of Odd Pricing in the Retail Sector‘, “Approximately 60% of prices ended in the digit 9.” In fact, “Three digits (0, 5, 9) accounted for nearly 97% of price endings.”

This is what retail experts call ‘charm pricing’. They use it, because it works.

Proof of this was found by William Poundstone, and published in his book, ‘Priceless’, stating that, “the use of charm prices, on average increased sales by 24% versus their nearby, ‘rounded’ price points.”

But why does such an obvious sales trick work at all?

Economists and psychologists have been asking this question for years, with the latest and most authoritative study on ‘charm pricing‘ conducted by researchers Eric Anderson of the University of Chicago, and Duncan Simester of Sloan School of Management at MiT.

In their study, ‘Effects of $9 Price Endings on Retail Sales’, they observed that, “The most common explanation [for the success of ‘charm pricing’] is that customers round prices down and essentially ignore the right-most digits. For example $59.99 might be coded as $59 or, in an extreme case, as $50.” They concede that they do not yet understand why buyers round down and not up, but instead surmise that, “…customers engage in left-to-right processing of digits. Thus, when comparing $55 with $43 a customer that looked at only the left-most digit would process this as $50 vs. $40, or a $10 price difference (rather than $12). Raising the price from $55 to $59 would have no impact on this customer’s perceptions of the price difference. However, lowering the price from $43 to $39 would create the perception of a $20 price difference (rather than $16).”

Another common theory believes ‘charm pricing’ works because, “…customers pay more attention to the right-most digits, [so what] customers may draw from $9-endings is that a price is low, discounted, or ‘On Sale’.”

But now a study has finally asked the question many chemical traders have been asking.

Does ‘Charm Pricing’ Strategy Work in the B2B Chemicals Industry?

In the study, entitled ‘Are behavioral pricing tactics also present in the B2B context? Evidence from a complex chemical B2B product‘, Prof. Maike Strudthoff of the University of Münster and her colleague Thomas Hamadi researched how industrial chemical products are priced in B2B markets.

They observed that ‘price charming’ does exist in the B2B industrial chemical markets, stating that, “This study depicted the landscape of price endings by analyzing the frequency of their occurrence on cent and dollar level for a highly complex chemical product. The results show that price setters particularly use $0, $5, $9 and 00¢ endings. These price endings are similar to the dominant endings found in previous B2C studies.”

Their study goes on to explain that in all likelihood, professional chemical traders are just as human as shoppers on the street, falling for the same psychology trick that retail customers have for products priced at 99 cents.

They write that, “Although B2B markets include challenges that differ from those in B2C markets, e.g. price negotiations and purchases by a buying center, many behavioral characteristics are present across diverse contexts. This leads to the assumption that there are ‘fundamental similarities within human choice-making’ in B2B and B2C markets and that many behavioral pricing theories in B2C markets could be applicable to B2B markets as well.”

They conclude by saying, “This finding is thus supporting the assumption that B2C price ending theories may also be applicable in the B2B context.”

The researchers do concede that the study is not definitive, particularly given the long and often secretive negotiations that occur in industrial chemical trading. As a result, the study was unable to analyse actual trading prices, as they make clear, stating that, “…only catalog prices were investigated. Because price negotiations are common practice in B2B context, it is unclear how far the sampled prices are true selling prices.”

So maybe there is more work to be done, to know if industrial chemical traders really are victims of ‘charm pricing’ or indeed any other psychological pricing strategy.

A quick look at the online chemical trading hub, SPOTCHEMI (which hosts this blog), shows that most offers to sell industrial chemicals end with a ‘0’. However, these are only opening bids, whether in the course of offer and counter offer, traders will use ’price charming’ as a negotiation strategy is unclear. But if chemical traders are human, then human psychology in industrial chemical pricing must exist. Mustn’t it?

The world is moving faster and faster. To stay in touch, we require more and more information, from an ever growing number of sources; 24 hr scrolling news, Weibo, Twitter and Tumblr. In the modern world the need to know first is important to us, but nowhere is it more important that in the world of business.

If proof of this was needed, then bear in mind that historians have calculated that in 16^th century England fashion moved at 4 miles per year. What was trendy in London in 1500 became fashionable in York (200 miles away) in 1550. Compare that to today’s fashion industry, which is based on moving from catwalk to customer in a matter of weeks, so called ‘Fast Fashion’. One of the leading proponents of which is the retailer Zara. In January 2016, Forbes magazine named Zara’s founder Amancio Ortega as the second richest man on the planet.

Step away from retail and into the B2B world and the competition for fast and accurate price information gets worse. In October 2014, the Wall Street Journal reported how those who paid for some stock price information services were getting their market news three tenths of a second faster than the general public, and as a result making a fortune from beating the public to the trade.

In the best-selling book ‘Flash Boys’, the author Michael Lewis tells the story of how stock exchange trader Brad Katsuyama discovered that trading companies were using the speed that the electronics processed trades to their advantage. If, after hitting the ‘buy’ button, the deal was able to be completed after 4 milliseconds, then it could be blocked by a faster computer, closer to the stock exchange that could make the deal in 2 milliseconds. That 2 millisecond advantage was the difference between profit and loss. A fast blink of the eye lasts 100 milliseconds.

Clearly, if you are a trader of any product, then you need up to the minute information.

If your grandfather was a chemical trader, then he watched as oil prices rose and fell as refineries shut down or wells dried up, but today’s traders watch oil prices that change by the minute.

Chemical traders need to keep an eye on Bloomberg’s market updates, CNBC’s scrolling commodity prices and Twitter feeds (you can follow us at Spotchemi here).

But fortunately, the industrial chemical markets (which buy and sell actual chemical products, not theoretical trades), have not yet reached Wall Street’s speed standards, where milliseconds make a difference. But it is still important to keep informed, especially if you are about to sign a contract to buy or sell chemical products.

For that reason, many traders use a chemical price alert system. They select their favourite products and are sent an email, text or Twitter message if those prices change, or whenever a deal is made on the Spotchemi chemical trading hub.

Is staying informed about commodity prices on the investors market useful? You tell us. Is staying informed about actual chemical products that are being bought and sold useful? We at Spotchemi think so. Because, in today’s business world two facts always hold true; Information is Power and Time is Money.

Which do you have?