In reaction to the fastest-paced surge in petrochemical feedstock prices in recent memory, Dow Europe (Horgen / Switzerland; www.dow.com) says it will discontinue market index formula pricing in its own future contracts with buyers of LDPE, LLDPE, HDPE, PP, PS, ABS and SAN in Europe, India, the Middle East and Africa.

According to Isidro Quiroga, regional commercial vice president for the Dow Basic Plastics division, the US chemical giant needs “more latitude” to adapt its own prices to the “volatile market conditions” and restore sagging margins. In future, he said, Dow will negotiate prices with individual customers according to its own internal calculation, just as it did 10 to 15 years previously. The group’s forward thrust is likely to be controversial among its customers, as well as the market indexes it benchmarks.