Monday, November 12, 2007

How Low Prices Sometimes Work

Remember those Aqua Dots containing a dangerous chemical? Why would such a chemical be included in a toy? The answer is simple: The dangerous chemical is a lot cheaper than the safe one the toys should have contained:

The toys were supposed to use 1,5-pentanediol, a nontoxic compound found in glue, but instead contained the harmful 1,4-butanediol, which is widely used in cleaners and plastics.


It's not clear why 1,4-butanediol was substituted. However, there is a significant difference in price between the two chemicals. The Chinese online trading platform ChemNet China lists the price of 1,4 butanediol at between about $1,350-$2,800 per metric ton, while the price for 1,5-pentanediol is about $9,700 per metric ton.

Note that unless you get caught you get the same price whichever you use. And getting caught is not that easy in China, where subcontracting has become an art form.