Response Summary

Background

ICIS is implementing a process of rolling consultation on all of its pricing methodologies. Consultation paper GMC01/16 is part of this formal process and covers all of the ICIS primary price points included in the ethylene weekly publications.

The consultation asked general questions about the suitability of the ICIS pricing methodology.

ICIS received five responses, two confidential and three public but anonymised. To read the three anonymised public responses, please click on the links below:

This summary takes into account all responses, both confidential and anonymous.

Of the five respondents answering the question about the reliability of the current ICIS ethylene methodology: two said that it provides a reliable measure of market value; one said it did not achieve this aim; one felt that the number of transactions captured was insufficient; and one did not comment on the reliability of the methodology.

One respondent requested more detail about the concluded deals which are included in the assessments in the report. Also more clarity on the rules governing spot assessments in weeks without deals.

This respondent also recommended that newcomers to the Europe contract process should be educated in the ICIS rules for reporting the settlement.

The same respondent said that the addition of deals concluded on market portals would improve the current methodology, and that editorial staff should be aware of compliance issues around signalling.

Another respondent wanted the identities of the initial contract settlers reported.

A third respondent requested the addition of contract prices for Asia-Pacific; more details about the market participants surveyed and the level of discretion used by reporters to evaluate the price levels in the case of unconfirmed deals.

This respondent also requested that the Europe monthly contract reference assessment should be based on net transaction prices after the deduction of rebates and discounts.

There was no consensus about the necessity for changes to the current methodology.

ICIS Decision

ICIS will continue to give as much detail as possible on the concluded spot deals which are used in the weekly price assessments.

The rules governing spot assessments in weeks without deals is explained in the Ethylene Methodology document, under the paragraph “Rationale for Ethylene Methodology”:

“In the absence of any deals, bids and offers will be used. During the assessment process we may consider other 3 information. However actual transactions, and bids and offers will always take precedence.”

The ICIS rules for reporting the Europe monthly contract price settlement are also explained in the Ethylene Methodology document under the paragraph “Ethylene Europe”:

“The contract price is negotiated between independent producers and their consumers from a broad spectrum of derivative sectors and is agreed on a gross basis. This base price will usually be subject to discounts relating to volume, size and/or delivery terms, but these discounts are agreed on a private and confidential basis. The contract price is published only when direct confirmation from two different producers and consumers, i.e. “2 + 2”, has been received from the parties concerned.”

ICIS will consider the inclusion of deals on market portals where these are confirmed in line with the normal confirmation process.

Compliance training for ICIS editorial staff includes signalling and global anti-trust legislation.

There are no plans to include a pan-Asian contract price in the ICIS report, since this does not exist in the market.

ICIS does not disclose the identities of individual contract settlers in the Europe report. However, a list of the key contract settlers may be obtained on request from the editor.

ICIS does not report on rebates and discounts to the Europe monthly contract reference assessment, as this information is not available from the contract partners. However, general information on the range of discounts may be obtained on request from the editor.

To provide further comments or feedback please contact Barbara Ortner, Head of Market Reporting: Barbara.Ortner@icis.com

This document is not open for consultation