Platts proposes to publish monthly industry-settled deltas for domestic PE and PVC contracts

Platts, part of S&P Global Commodity Insights, proposes to launch monthly industry-settled deltas for the domestic contract polyethylene and polyvinyl chloride markets, effective Oct. 1.

These industry settlements, in cents/lb, would complement the FAS Houston PE and PVC spot assessments and continue Platts coverage of the domestic US markets.

Platts understands that in the US PE and PVC markets, freely negotiated monthly contract prices are settled on a delta basis, or as a price differential from the previous month's contract price, rather than an outright price basis.

Platts has observed that these contract settlements are retroactive, with a monthly settlement reached during the first days of the following month. The proposed settlements would be published and databased to the first day of the month, when Platts has information that a contract settlement for the respective month has been reached.

For example, the discussions about the contract price changes from July to August would normally conclude by Sept.10. Once the confirmation of these settlements is received, Platts would database them against Aug. 1.

In case of the failure to reach a settlement in a particular month, Platts understands that it is customary to roll the prices from the previous month and factor in the two months' changes into the next negotiations. For example, should discussions for August collapse, Platts may database "zero" against Aug. 1, and publish the next month's agreed delta against Sept. 1.

The proposal follows a recent discontinuation of the US PE contract price assessments .

The proposal also coincides with Platts' proposal to discontinue US PVC contract price assessments.

The proposed settlements would be published on Polymerscan, Platts Connect and Platts Petrochemical Alert.

Please send all comments, feedback and questions to petchems@spglobal.com and pricegroup@spglobal.com by Sept. 2.

For written comments, please provide a clear indication if they 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.