Background
ICIS is implementing a process of rolling consultation on all of its pricing methodologies. Consultation paper GMC12/19 is part of this formal process and covers all of the ICIS primary price points included in the vinyl acetate monomer weekly publications. Vinyl-Acetate-Monomer-VAM-Methodology-Consultation-2019
Summary of responses
The consultation asked general questions about the suitability of the ICIS pricing methodology.
ICIS received nine responses. This summary takes into account all responses.
One respondent requested the return of the Europe quarterly contract price assessment.
The same respondent noted that the difference between Europe contract assessment and spot assessment is too wide, and needs more buyer and trader input.
Europe report commentary should include the methanol contract price, as it does for other feedstocks: acetic acid and ethylene.
In the Asia report, on the issue of splitting the current CFR NE Asia assessment into CFR Taiwan and CFR Korea:
In favour of keeping it CFR NE Asia (7 respondents)
One respondent couldn’t see the point.
Another respondent said the Taiwan spot market was too small to support a separate assessment, and the Korea spot market might just support one, but it would not show much movement, maybe once a month.
Another 5 respondents wanted to continue the CFR NE Asia assessment.
In favour of splitting it (1 respondent)
One respondent wanted to split out Taiwan, and keep Japan and Korea in the CFR NE Asia assessment.
In Asia, on the question of including producer purchases in the spot assessments, 3 respondents were in favour. One was against.
In Asia, on the issue of assessments post-2020 when Korean production comes onstream, one respondent suggested changing CFR NE Asia to CFR China.
Another suggested adding FOB Korea and CFR China.
Another wanted to continue CFR NE Asia.
Another said it was too early to decide.
In Asia, one respondent wanted the spot assessments based on offers and bids as well as deals.
In Asia, two respondents wanted to see narrower ranges, eg $40/tonne.
In Asia, one respondent wanted FOB China deals to be normalised to include in the CFR NE Asia assessment.
ICIS Decision
ICIS is not able to reinstate the Europe VAM quarterly contract assessment because the companies which used to settle quarterly contracts have all moved to monthly contracts.
Europe feedstock commentary will be expanded to cover methanol commentary.
The Asia report CFR NE Asia assessment will not be split into individual country assessments.
In the Asia report, producer purchases will continue to form part of the spot assessment basis.
ICIS will endeavour to keep Asia spot assessment ranges as narrow as possible, while following the methodology for including the relevant locations.
ICIS continues to welcome any feedback on its vinyl acetate monomer (VAM) methodology outside of the formal consultation process.
To provide further comments or feedback please contact Barbara Ortner, Head of Market Reporting: Barbara.Ortner@icis.com
