PET Methodology Consultation – Summary of responses
Following the announcement that ICIS would be launching a formal methodology consultation process, we have received 6 confidential responses to consultation GMC 32/18.
One respondent asked for the addition of an assessment that would be an index of all the raw materials going in to PET. This would be for each region, so four new raw material indices for: Asia, Europe, US and Latin America.
This respondent also wanted the addition of a new contract assessment in the Europe report, which would be partly derived from raw material prices, and partly an average of spot prices.
The second respondent asked to have the Europe contract assessment as a single number rather than a range. The single number would be an average of spot prices, with the highs and lows discarded.
The third respondent wanted to keep the Europe weekly domestic assessment, and change the contract price range to a single number. This would be a monthly average of the four weekly averages.
The fourth respondent noted that ICIS should be cautious about publishing a new index or changing the name of the quotes.
The fifth and sixth respondents wanted to keep a range in the contract assessment, rather than a single number.
The seventh respondent wanted the monthly price to be an average of the low and the average of the high of the named month and requested that an explanation of the Contract price be added to the price table. The W. Europe and E. Europe definitions should be merged as one EU quote, and should not include countries that do not buy domestic material on a regular basis.
The eighth respondent (Equipolymers) did not want the monthly assessment to include deals conducted in the week leading up to the current month, as in a rising market this distorts the low end prices of the current month, and requested that any methodology changes should not be made before January 2019.
ICIS Summary and Decision
Varied opinions were submitted about the future of the existing contract price assessments. Respondents agreed that it was a priority to keep the price history of the existing contract assessments for continuity. They also saw value in having a monthly number which comprised the average of the month’s four or five weeks of Domestic assessments. To clarify that the “contract” assessments are a round up of the weekly Domestic assessments, an extra line will be added alongside the words “Contract Prices” on the PET report price table. This will be done as soon as technically possible, but most probably within the third quarter of 2018.
ICIS will not be proposing any other immediate changes to the methodology of the global PET reports. Any decision to change this methodology will be communicated to subscribers using the usual channels and with the usual notice period.
ICIS continues to welcome any feedback on its PET methodology outside of the formal consultation process.
Click here to view the PET-Methodology-Consultation-2018
To provide further comments or feedback please contact Barbara Ortner, Head of Market Reporting: Barbara.Ortner@icis.com
