Background
ICIS is implementing a process of rolling consultation on all of its pricing methodologies. Consultation paper GMC02/19 is part of this formal process and covers all the ICIS primary price points included in the propylene weekly publications. Propylene-Methodology-Consultation-2019
The consultation asked general questions about the suitability of the ICIS pricing methodology.
ICIS Summary
ICIS received three responses. This summary takes into account all responses.
One respondent answered the question about the reliability of the current ICIS propylene methodology, and noted that it was reliable.
Regarding the reporting of spot prices, one respondent wanted the chemical grade propylene (CGP) spot assessment to be moved in line with the more liquid polymer grade propylene (PGP) spot assessment in weeks with no CGP deals.
The same respondent wanted CGP parcels with quality issues or prompt timing to be excluded from the spot assessment, with prices moved instead in line with PGP.
The respondent also noted that all players should give full disclosure of all their spot business.
Another respondent suggested avoiding the reporting of spot deals in the last three to four days of the month during the contract negotiation period.
Decision
Regarding the spot market, ICIS will survey market participants to see if there is support for moving the CGP spot assessment in line with PGP in weeks with no CGP deals.
ICIS will also do its best to ascertain quality details of spot parcels.
ICIS will try to encourage participants to give full disclosure of spot business. This will require changes to companies’ internal policies.
ICIS will consider avoiding reporting spot deals in the last three to four days of the month, with a decision by 1 September 2019.
Regarding the contract price assessment, in line with the ICIS Decision on Ethylene, further details of the contract process will be included in the revised methodology document. This will be published online by the end of May 2019.
ICIS will trial from the July 2019 contract assessment onwards, a process of assessing the contract price from bilateral settlements. This will entail calculating the arithmetic average of the settlements, so that each settlement counts once.
ICIS will confirm in the methodology document that the published contract number is a result of independent bilateral negotiations.
A link to this page will be displayed in the weekly ICIS Europe report for four weeks.