Response

Oxo-Alcohols Methodology Consultation – Summary of responses

We have received a number of responses from key market players. To read the anonymised public responses please click on the links below.

There were ten formal responses to consultation GMC 26/14. Six of these were confidential, three responses were sent for anonymous publication, and one was public.

Most of the responses were regarding the Asia report. One response was regarding the US and Europe reports.

This summary takes into account all responses, both confidential and public. These are the answers pertaining to methodology. Only oxo-alcohols methodology issues will be included in the summary.

A clear majority of respondents agreed that the current ICIS oxo-alcohols methodology provides a reliable measure of market value.

Opinions were mixed about the Asian spot assessment methodology (Q5). Most respondents felt that the assessments should cover either dutiable or duty-free, but not both in the same range. One respondent noted that the CFR East Asia assessment was actually a CFR China assessment, and should be rebadged as such.

Regarding the width of the Asian spot ranges (Q6), one response was that the width was acceptable, while others felt that it was too wide because the methodology was encompassing too much. One response noted that FOB Japan and FOB Korea assessments were wrongly calculated as netbacks from CFR China, when the parcels concerned were in reality being exported to South America and West Asia.

Suggestions for expanded coverage (Q7) were: India, Japan, INA, DINP and more on Asian production issues.

On coverage of the US and European oxo-alcohols markets, the sole respondent requested that: more weight should be given to a producer’s viewpoint; a butyl acetate assessment should be added; and assessments should focus on the mode average rather than lowest and highest numbers. Other comments referred to the butyl acetate market and will be used in that consultation.

ICIS Initial Decision

In view of the mixed opinions about the Asian spot assessment methodology (Q5), ICIS plans to review the feedback for another month and to make a final decision by 1 December 2014.

Regarding the width of the Asian spot ranges (Q6), it was decided that since this was not an issue for the DOP assessment, this methodology would remain unchanged. For NBA, opinions were mixed, and so ICIS plans to review the feedback for another month and to make a decision by 1 December 2014.

On the question of adding new market coverage, ICIS intends to formalise the current India spot price table in the commentary as a new assessment. The new CFR India assessment for 2EH will be launched by 9 January 2015.

There was little market interest in expanding export price coverage, so this will remain at the current level.

ICIS Final Decision

Regarding the Asian spot assessment methodology: for NBA – ICIS will normalise the N-Butanol (NBA) CFR northeast Asia assessment in the Oxo-Alcohols (Asia Pacific) report to a non-dutiable basis starting 9 January 2015 in order to address the issue of having a wide range.

For 2EH – ICIS will remove the CFR E Asia (non-dutiable) assessment in light of the lack of spot liquidity and is also gathering feedback on the possibility of introducing a CFR SE Asia assessment.

ICIS continues to welcome any feedback on its oxo-alcohols methodology outside the formal consultation process.

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