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November 16, 2007
1 Min Read
Polymer producer Ineos Polyolefins (Lyndhurst, England) claims it wants to help processors to iron out some of the rollercoaster price fluctuations of its polyethylene (PE) wire and cable grades used for insulation and jacketing. It proposes doing this by coupling end material costs to quarterly ethylene prices. The company already does the same in some other markets where prices are linked to the quarterly West European Contract Price for Ethylene (WECP C2).
Ineos claims that by basing prices on ethylene, the main raw material for PE, the procedure will simplify and stabilize the procurement situation for its wire and cable extrusion customers who use both neat resins and compounds. “In order for our wire and cable customers to have a sustainable position in their markets, and support necessary investment in R&D, it is important that they have greater stability of prices,” says Andre Scheelen, sector manager construction and durables, Ineos Polyolefins. “Unlike purely commodity markets, where switching suppliers can be commonplace, contracts in the wire and cable market are typically negotiated for one or more years.”
The quarterly approach to pricing, says Scheelen, will be more stable than doing this monthly and prices linked to ethylene should be less volatile, which allows cable processors a greater ability to manage their short-term business.—[email protected]
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