Resin Price Indexes
The acquisition of Chemical Data LLC by ICIS placed a spotlight on an important part of the materials market that's rarely discussed in the open: resin pricing.
CDI, along with IHS Market, is one of the most widely followed resin pricing indexes. Plastics market players ranging from resin makers to processors to consumer brand owners use the prices reported by these indexes to settle contracts on a monthly basis.
This process avoids lengthy and unproductive haggling over pricing while also providing each side with a fall guy ("Hey, don't blame me…") if they don't agree with what's been reported.
This process also doesn't really exist for any other commodity product that's sold in billions of pounds. Although some have had limited success, plastic resin pricing largely has proven immune to futures contracts and other more transparent methods by which prices are set for commodities. The reasons for this are too complex to cover in a blog post. It's safe to say that resin price indexes still hold considerable influence.
Consultant at Stretch Your PE $, LLC
1 å¹´It's also different from other commodities in that you don't know what you're paying for this month's resin until month-end or even a few days after! Imagine filling up your car with gas all month and then being surprised by the bill at month-end!