SUBSCRIBER NOTE: Platts proposes to assess European ethylene, propylene month gross contract prices

Platts proposes to launch month-ahead indicators for European ethylene and propylene gross contract prices on a daily basis effective June 13 in order to bring greater transparency to the contract market and to allow manufacturers a clearer idea of future prices.

Platts will use a rolling regression model to assess the contract price in the absence of confirmed settlements. Proven deals will prevail over the quantitative element. The month would roll on the first of each month.

The independent variables used in the rolling regression model are the differences between the latest 10-day averages and the 10-day averages since the last settlement for four published daily prices.

1) Platts' month-ahead ethylene spot price; 2) Platts' month-ahead propylene spot price; 3) Platts' naphtha M1 swap price 4) Platts' benzene CIF ARA M2 price.

Platts has backchecked the quantitative model and found that on almost half of all settlements in the past five years the model predicted values that were within Eur10 of the industry CP price on the day the latter settled.

Please send any comments and queries to pl_petchems_ln@platts.com by May 9, 2016. For written comments, please provide a clear indication if comments are not intended for publication by Platts for public viewing. Platts will consider all comments received and will make comments not marked as confidential available upon request.