NWE PET net price, realignment for gross prices

Following internal reviews and feedback from industry participants, Platts will be introducing four new Northwest European polyethylene terephthalate net contract price weekly assessments on February 23, 2011, to be published in the Platts Petrochemical Alert and the Polymerscan.

These assessments will be for:

a. PET bottle-grade FD NWE net CP basis Eur/mt b. PET bottle-grade FD UK net CP basis GBP/mt c. PET bottle-grade FD UK net CP basis Eur/mt d. APET film grade FD NWE net CP basis Eur/mt

These domestic PET contract price assessments will reflect net price agreed between suppliers to medium-sized converters/processors for regular monthly business. Platts' assessments reflect the negotiation process, and are adjusted as confirmation is received both on pricing indications and concluded deals from buyers and sellers.

European assessments will cover indigenous and/or imported Western European prime material. Product sold in plain or unmarked bags will not be included in the assessment unless the market considers such business to be representative.

Bottle-grade assessments will cover standard bottle-grade material with an intrinsic viscosity (IV) of between 0.7-0.86 and is B* neutral. The film grade assessment refers to APET sheet with the same characteristics. A IV value in the range that Platts quotes represents a commodity grade plastic, which is usually used for bottled water. B* is a measure of the degree of yellowness of the resin.

Following the changes observed in the PET contract negotiations, Platts has observed net contract pricing, instead of gross contract pricing, now prevails in most contractual arrangements. Platts proposes to introduce this change via the new assessment launch on February 23, 2011 to reflect the typical market practices.

In addition, Platts is proposing to re-base its current NWE PET gross contract price assessments for FD NWE and FD UK, following an internal review of the price assessment process. The downward re-alignment of gross contract prices is required to reflect comprehensively reported and verified transactional data gathered from the European market in the assessment process. This re-alignment is not indicative of the fall in PET prices in Europe, but rather the outcome of this internal review.

Data collected and corroborated by the market suggests that PET contract prices have been progressively rising due to feedstock pressure. Platts proposes to complete this re-alignment on April 1, 2011.

For feedback and queries please contact Ilana Djelal, ilana_djelal@platts.com, with a copy to petchems@platts.com and pricegroup@platts.com.