In part one of this series, I talked about how to understand polyester pricing swings and why rising costs and a dynamic market has thrust the industry into a volatile time. In part two, I touched on understanding market, spot and indexed pricing. In this post, I’ll focus on index formulas, particularly once a supplier and client decide to index a price, what does it look like? In general, designing a simple index formula is the best strategy. The difficult part is agreeing to the finer details up front. Both parties must carefully consider the following aspects.

In part one of Service Thread’s blog series on polyester yarn pricing, I discussed the reason for the unpredictable cost swings with polyester yarn pricing. In addition to understanding the global dynamics that effect these swings, it is also important to understand the pricing strategies used.

I’ve been in the industrial yarn business for 21 years and haven’t seen anything quite like the current polyester pricing situation. If you buy or sell synthetic yarns, I’m sure that you feel the same way. The fast pace of the modern business environment has impacted every market’s volatility, even the very mature ones (read “old textile businesses”).