Background
ICIS is implementing a process of rolling consultation on all of its pricing methodologies. Consultation paper GMC03/16 is part of this formal process and covers all of the ICIS primary price points included in the styrene weekly publications.
The consultation asked both general questions about the suitability of the ICIS pricing methodology and questions addressing specific styrene market issues.
ICIS received three responses. To read the anonymised public responses please click on the links below.
This summary takes into account all responses, both confidential and anonymous.
Of the three respondents answering the question about the reliability of the current ICIS styrene methodology, two said that it provides a reliable measure of market value.
One respondent requested that the Europe monthly styrene contract price FOB ARA truck should be replaced with an FCA Incoterm.
Another respondent asked for more details of volumes attached to the deals used for the Europe spot assessments.
A third respondent asked for the addition of a China contract price assessment; the exclusion of deals to consumers who are also producers; and more details of the level of discretion used by reporters to evaluate prices where deals are unconfirmed.
ICIS Decision
There was no consensus about particular changes to the current methodology, so ICIS will survey the market to establish whether there is support to remove the Europe monthly styrene contract price FOB ARA truck, also known as the monthly truck contract price, since it is no longer negotiated between sellers and buyers. A decision on this will be made by the end of July 2016.
ICIS will continue to give as much detail as possible on the volumes for the concluded spot deals which are used in the weekly price assessments. The standard size of parcels in all regions is given in the Styrene Methodology document.
There are no plans to include a China styrene contract price in the ICIS report, since this does not exist in the market.
ICIS will not exclude spot deals to producers, since spot buying by producers is considered a valid part of the market, particularly in times of plant shutdowns. However, deals which are considered to be outside the range of typical market activity can be excluded, as described in the Styrene Methodology document, under the paragraph “Exclusion of data”:
“ICIS also excludes from its assessments transactions where ICIS market reporters have reasonable grounds to doubt that a transaction is representative of typical market behaviour: for example, where a deal is concluded disregarding the best bid or offer on the market; where there is evidence that a market participant has disclosed only part of its market activity to ICIS; or where a transaction lies outside the prevailing range of typical market activity.”
Similarly, unconfirmed deals may be excluded if considered outside the range of typical market activity.
ICIS Final Decision
ICIS will remove the Europe monthly styrene contract price FOB ARA truck, also known as the monthly truck contract price from August 2016. This contract price is no longer negotiated between sellers and buyers, and so it is not considered a genuine contract price to be reported as an ICIS assessment.
To provide further comments or feedback please contact Barbara Ortner, Head of Market Reporting: Barbara.Ortner@icis.com
