Most resin buyers believe they're paying "market price." Their contracts reference an index. The formula looks objective. The process feels fair.
But that benchmark you're tied to isn't built on what the market actually trades at. It's built on what suppliers say they want. Legacy indexes like ICIS, IHS, and CDI rely heavily on survey data—posted prices, reported offers, supplier assessments. The result is a number that reflects the ceiling of the market, not the clearing price. And that gap costs you real money every month.
Here’s the good news: better data exists. Transaction-based benchmarks flip the model entirely. Instead of capturing what suppliers ask for, they capture what buyers actually pay. This shift changes how you evaluate pricing, how you negotiate, and how much leverage you bring to the table.
In this guide, we'll break down why traditional benchmarks mislead, what modern benchmarks should look like, and how to use real clearing-price intelligence to stop overpaying. Let’s get started.
Buyers don't rely on flawed benchmarks because they're careless. They rely on them because the entire system is built around them.
But index-backed contracts create a dangerous sense of objectivity. When your price is "Index + Delta," the formula feels neutral. It looks like math. But if the index itself is inflated—lagging behind spot, skewed by survey methodology, corrected through opaque adjustments—then your delta just sits on top of a broken base.
Suppliers reinforce this constantly. When they announce increases, they point to the index. "The market moved." "CDI is up." But the index often moves because suppliers reported those increases, not because transactions justified them.
The time lag only compounds the problem. Buyers compare their price to a number that's weeks behind real market activity. That comparison might feel fair. But it isn't.
Historically, the most important question never got asked: What price actually cleared last week? Thankfully, those times have changed. But more on that in a bit.
The core problem with legacy benchmarks is simple: they're built on what suppliers say, not what the market does.
Traditional indexes rely on voluntary surveys. Publishers call suppliers, traders, and select buyers. They collect posted prices, offers, and "market color." Then they triangulate a number.
Consider what's actually being reported:
The published benchmark reflects the ask (the top of the market) and not the trade (what actually cleared).
Think of it like buying a house based on Zillow list prices instead of sold prices. You'd systematically overpay. That's exactly what happens when you benchmark resin costs against survey-based indexes.
This compounds over time.
Survey respondents tend to be suppliers or mega-buyers with incentives to stabilize or elevate reported pricing. Small and mid-market buyers—the ones paying the highest per-pound rates—rarely shape the published levels.
During volatility, the gap widens:
The benchmark rewards supplier narratives. It doesn't reflect buyer realities.
If survey bias is the slow leak, Non-Market Adjustments are the hidden reset button. When publishers finally acknowledge the drift, they issue non-market adjustments—corrections that can move prices 10, 20, even 25 cents overnight.
In other words, NMAs are publisher-initiated corrections. When a benchmark drifts too far from real transaction levels, publishers apply a discretionary adjustment to close the gap. Sounds reasonable. It isn't.
Here's what actually happens:
The supplier's margin stays elevated. You see a paperwork adjustment, not a price reduction.
Repeated NMAs compound into permanent margin expansion. Each "correction" resets the baseline slightly higher relative to feedstocks. Over years, the gap between what you pay and what the market justifies quietly widens.
NMAs protect index optics. They don't protect buyer interests.
Many buyers pay twice for the same feedstock movement without realizing it.
Here's the pattern:
The problem? Those inputs are already reflected in the index move. By paying the index increase plus the surcharge, you're covering the same underlying cost driver twice.
This creates silent compounding—a margin leak that goes unnoticed in index-anchored contracts. Finance sees the index moved. The surcharge looks like a separate line item. Nobody connects them.
Benchmarking on price alone masks this inflation. You need visibility into the spread—the gap between resin price and feedstock cost—to catch it. That way, when a price increase letter lands in your inbox citing 'market conditions,' spread benchmarking tells you whether that claim holds water.
Before evaluating any provider, understand what a benchmark should deliver. Use this as your filter.
Benchmarks should reflect clearing prices, not posted asks.
You should know exactly how the benchmark is built:
If you can't answer these questions, you're trusting a black box.
Strong benchmarks triangulate multiple inputs:
This produces a stable, objective corridor—not a single "magic number" that can be gamed.
Benchmarks should reflect realistic volume tiers and regional differences.
Mid-market buyers need data that reflects their cost position—not mega-buyer deal levels that they'll never see. A benchmark built on Fortune 100 transactions doesn't help a 10-million-pound processor evaluate their pricing.
ResinSmart was built to solve the problems outlined above. The methodology is fundamentally different from legacy indexes—and that difference shows up in every negotiation.
ResinSmart benchmarks are built on anonymized invoice and transaction intelligence. Actual sold prices. Real deal flow.
This reveals what we call the "shadow market":
ResinSmart doesn't rely on supplier-reported data. The benchmarks reflect what buyers pay—period.
Price alone doesn't tell the full story. The spread does.
Spread = Resin Price − Feedstock Cost
This metric exposes margin expansion and identifies negotiation windows. Example:
Now imagine ethylene drops to $0.30, but your PE price stays flat at $0.90. Your supplier's spread just jumped to $0.60—a 20% margin expansion.
That's your negotiation lever. You're not arguing about "market price." You're showing that their conversion margin hit a multi-year high. You want that $0.10 back.
Spread analysis turns vague pricing conversations into concrete margin discussions.
Legacy indexes publish monthly or weekly. By the time you see a drop, you've already placed orders at the old price.
ResinSmart identifies market shifts days or weeks earlier:
This prevents buyers from locking in outdated pricing. When the market moves Tuesday, you know Wednesday—before Friday's order.
Better data only matters if you use it. Thankfully, even buyers without massive volume leverage can level the playing field when they bring transaction-based benchmarks to the table. Here's how to put transaction-based benchmarks to work.
Pull 12 months of your contract index. Compare it to spot or transaction benchmarks for the same period.
Calculate your "Premium to Reality":
This exercise reframes the conversation. You're not asking for a discount. You're identifying how much you've been overpaying relative to market.
Price arguments create stalemates. Both sides can cherry-pick data. Spread arguments reveal margin—and margin is harder to dispute.
When feedstock drops but your price holds, the spread widens. That's visible. That's measurable. That's your leverage.
Script: "PGP is down $0.04 over the last 60 days. Your conversion margin is up. I need relief."
Suppliers can argue about price levels. They can't argue about their own margin expansion.
When suppliers cite "market conditions" to justify increases, don't accept it at face value. Counter with specifics:
Script: "You're asking for flat pricing, but PGP is down $0.05. Help me understand the disconnect."
This forces suppliers to justify their margin, not just their price.
Legacy benchmarks weren't built for buyers. They were built in an era when suppliers controlled information and mid-market processors had no alternatives. That era is over.
But transaction-based benchmarks correct the structural bias. They reveal the real clearing price. They expose margin expansion. And they give you the leverage to negotiate from strength instead of faith.
ResinSmart delivers exactly that—unbiased benchmarks built on actual transaction data, spread analytics that expose supplier margin, and real-time signals that keep you ahead of the market.
Ready to see what you're actually paying versus what the market says you should?
Request a ResinSmart demo and get the benchmark clarity your negotiations deserve.