How a Price Fundamentals price is built
Each price is decomposed into the layers that make it up, every layer carries its basis and confidence tier, and the layers reconcile to the price buyers actually see.
Net consumption, not production
Demand is modelled from the application side: how much of a chemical is actually consumed by each end use, rather than inferred from production or shipment figures. That avoids double counting along the value chain. Supply is modelled from capacity and utilisation by producing region. Price movement is then explained through the variables that drive it.
The landed-cost build-up
Each layer states its basis. The layers reconcile to the latest observed price by construction, so a mismatch is traced to a specific line rather than averaged away.
Feedstock
Upstream price multiplied by the process yield ratio.
Conversion
Energy, utilities and process cost from published process economics.
Producer margin
Modelled from cycle position and capacity utilisation.
Duty and port
From the published tariff schedule for the destination.
Freight and channel
Distributor margin and inland freight, from channel interviews where available.
Confidence tiers
Set per layer and per market, not once for the product.
| Tier | Meaning |
|---|---|
| Reported | Sourced directly from a named, checkable record such as a trade-press marker or a customs tariff |
| Derived | Calculated from reported inputs with a stated formula |
| Modelled | Built from stated assumptions where no direct reference exists |
| Analog | Forecast benchmarked against how a comparable chemical behaved through a similar supply and demand cycle |
| Gap | No reliable source. Shown as a named gap or an implied residual, never filled silently |
Markets are tiered by access, not size
Tier A markets have reference pricing and a primary interview base. Tier B markets are priced on fundamentals and cross-checked as the interview network builds out, starting in India, then Europe and the Middle East. Tier C markets are fundamentals build-up only. A market with no source at all shows a dash, not an invented number, because a geography with nothing behind it has no reconciliation to lean on.
Primary research
We interview manufacturers, buyers and distributors to test the layers public data cannot see, such as channel margins and inland freight. Interview inputs are tiered separately from published ones, attributed to the type of respondent rather than a name, and refreshed on a stated cycle.
Where two credible inputs disagree, both are recorded and the reconciliation is documented rather than hidden in a blended figure.
Walk through the build-up on a chemical you buy
An analyst will take one of your inputs apart layer by layer.