NETSPIRES — Procurement and Supply Market Intelligence

Reference cost model · scenario analysis

Start with a usable midpoint—then challenge the spread.

This first complete example follows U.S. Gulf Coast propane through PDH propylene to saleable PP. It combines one pinned EIA observation, a sourced density reference, a source-supported facility feed ratio, and explicitly proposed conversion ranges.

1 · Current upstream price$0.703/galU.S. EIA Mont Belvieu propane spot price FOB · 2026-07
2 · Same price on a mass basis$366/t propaneDERIVED using 4.24 lb/gal; unit conversion only, not PP cost.
3 · What the model calculates nextPropane → propylene → PPFeed requirement + conversion + polymerization + fixed grade/landed allowance.

Buyer takeaway: the $366/t figure answers only “what does one tonne of propane cost at the observed benchmark?” The base PP reference below adds the quantity of propane required and the costs of making propylene and PP. Compare that complete reference with the supplier quote—not $366/t alone.

Low / base / high interpretation

The midpoint is the negotiation reference; the range shows what can move it.

Low case

$955/t PPPropane feed $420PDH conversion $250PP polymerization $135Grade + landed $150

Base case

$1014/t PPPropane feed $439PDH conversion $275PP polymerization $150Grade + landed $150

High case

$1072/t PPPropane feed $457PDH conversion $300PP polymerization $165Grade + landed $150

MODEL_OUTPUT — REFERENCE ONLY — NOT OBSERVED PRICE. The base case is a transparent midpoint, not an assertion that a particular plant has these costs. Actual resin price can be below or above the range because of contract timing, integration, co-product treatment, utilization, grade, margin, inventory, freight, duty and market balance.

What is observed, calculated, or used as an engineering reference?

InputLowBaseHighBasis and interpretation
Propane benchmark$0.703/gal · 2026-07Observed: EIA Mont Belvieu upstream benchmark.
Propane density4.24 lb/galConversion reference: historical pure-propane density used only to convert $/gal to $/t.
Fresh propane / propylene1.151.201.25Engineering range: theoretical minimum is 1.048 t/t. The range allows for conversion, selectivity, recycle, purge and losses; the 1.20 midpoint is supported by one disclosed facility statement, not a universal plant average.
PDH conversion, USD/t propylene250275300Planning range: non-feed PDH conversion envelope for utilities, catalyst, maintenance, labor and fixed operating recovery. It tests sensitivity and must be replaced by comparable plant or supplier evidence.
PP polymerization, USD/t PP135150165Planning range: polymerization, catalyst, utilities, finishing and pelletizing envelope. Grade additives and delivery are kept in the next row to avoid double counting.
Grade + landed, USD/t PP150150150Held-constant boundary: grade, packaging and delivery allowance is fixed across all three cases so the chart isolates feed and conversion sensitivity. Replace it with the actual delivery boundary.

Compare the model with your actual U.S. supplier quote.

Low model$955/t
Base model$1014/t
High model$1072/t
Enter a quote with the same grade, delivery boundary and period.

Why no default market price? A Census import unit value mixes origin, grade, freight and customs basis and is not a U.S. domestic producer price. It is therefore not used as the default comparator.

Separate import context

Do not substitute customs unit values for U.S. domestic production prices.

Monthly U.S. import customs value divided by reported quantity is retained only as trade context. Origin, grade mix, freight, duty, customs valuation and timing make it non-comparable to a domestic plant-gate or delivered supplier quote.

PP · HTS 3902100000

$1130/tReference corridor $1017–$1243/tPolypropylene · 2026-06

ABS · HTS 3903300000

$2497/tReference corridor $2247–$2747/tAcrylonitrile-butadiene-styrene copolymers · 2026-06

PC · HTS 3907400000

$3690/tReference corridor $3321–$4059/tPolycarbonates · 2026-06

PMMA · HTS 3906100000

$4842/tReference corridor $4358–$5327/tPolymethyl methacrylate · 2026-06

PVC · HTS 3904100000

$1289/tReference corridor $1160–$1417/tPVC, not mixed with other substances · 2026-06

Comparison rule: use an actual supplier quote with the same grade, geography, period, volume and delivery boundary in the model comparison above. Import unit values do not calibrate or correct the domestic route model.

Industry price transmission

Translate crude movements through the full PP value chain.

Naphtha commonly follows crude more closely than olefins or resin do in the short run. The intervening cracker margin, co-product basket, inventory and contract reset absorb or delay part of the shock.

1 · Feed linkageNaphtha is crude-linked; ethane and propane follow regional gas/NGL balances.
2 · Margin absorptionIf the olefin basket rises less than feed, cracker margin compresses; if feed falls faster, margin can recover.
3 · Contract lagMonthly formulas and negotiated resets can delay resin-price transmission.
4 · Market overrideOperating rates, inventory and demand can outweigh the direction of feed alone.

Interpretation: estimate the buffer from the measured residual between the feed-cost change and the weighted product-basket change. Transmission varies by route and timing. Review the supporting evidence →

How a buyer should use the result

  1. Compare the supplier quote and its change against the base and range—not against crude alone.
  2. If the quote is higher, ask which conversion, utilization, grade, logistics or commercial factor explains the premium.
  3. If lower, test whether integration, contract timing, co-product value, inventory or market balance explains the discount.
  4. Adjust the reference inputs only when the supplier provides a comparable route, grade, period and delivery basis.