COVERAGE NOTE: Notice of proposed change to sack kraft price coverage

BRUSSELS, Oct. 8, 2015 ( PPI Europe ) – Our sack kraft prices are currently reported quarterly, in the first month of each quarter.

Problem: When PPI Europe publishes prices, what if negotiations for the quarter aren’t yet concluded? For instance, assume it is the first quarter (Q1). Our Q1 price assessment only recognizes Q1 price changes that have actually been agreed by when we publish, e.g. 15 January. For Q1 negotiations that close after publication of our price assessment on 15 January, we can’t reflect those prices until publication of Q2 prices. However, this is somewhat misleading – the Q2 price assessment would thus reflect not just Q2 market conditions, but some Q1 market conditions as well.

Proposed solution: Continue to assess prices on a quarterly schedule, but publish monthly prices retroactively. For instance, we would publish prices in January. Then, when assessing prices in April, we would publish prices for February and March as well as April. If Q1 negotiations were completed by the time prices were published in January, the February and March prices would be the same as January. But if Q1 prices were only partially reflected in the January price, and negotiations were concluded after the January price assessment was published, February and March prices would reflect that additional price development.

If you have comments on the proposed solution, please contact sack kraft editor Anne Grimbert at agrimbert@risi.com

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