Meaning
External market reports provide the specific data points used to track the spot and contract prices of plastic resins. The icis resin index offers a standardised data point for buyers and sellers to settle transactions without daily price negotiation. It covers various grades including polyethylene and polypropylene.
Data Source
Market analysts collect transaction data from a broad range of industry participants. Because the icis resin index reflects verified trades and bids, it provides a neutral reference point for long term supply agreements. Regional variations in the index account for local supply and demand balances.
Pricing Application
Formula based contracts often incorporate this specific benchmark. When a converter uses the icis resin index, the sales price to the final customer fluctuates according to the published monthly change. This transparency reduces friction during periods of extreme feedstock volatility.
Audit Procedure
Verification of the applied price requires a clear link to the publication date. Companies using the icis resin index must align their accounting cycles with the release of the final monthly assessments. Any delay in reporting can create a temporary mismatch between cost of goods sold and revenue.
Timely reconciliations prevent financial discrepancies and support accurate margin reporting at the end of the fiscal period.
