Research by Subject: CHEG400: Process Engineering: Adjust Prices with PPI

Adjusting Older Chemical Prices with PPI

While current bulk chemical prices are challenging to find, historical information is more readily available. Producer Price Indexes (PPI) can be used to adjust this older information to current prices (see Hubbard 2021). PPI measure the average change in prices paid to US producers of goods and services (US Bureau of Labor Statistics).

Updated Price = Older Price x [(Cost Index at Newer Date) / (Cost Index at Older Date)]

Hubbard, D. E. (2021, March 24). Efficacy of Using Producer Price Indexes for Bulk Chemical Prices in Student Design Projects. ASEE 2021 Gulf-Southwest Annual Conference. https://peer.asee.org/36374

Finding PPI

Chemicals and Allied Products
The Federal Reserve Bank of St. Louis produces a list of PPIs related to the chemical industry. Additional PPIs are available on the website.
Archived Producer Price Index Detailed Report Information
The US Bureau of Labor Statistics also publishes PPI lists.

Remember that PPI adjustments are only estimates. Consider if the adjusted price is reasonable before including it in your study.

Example

Updated Price = Older Price x [(Cost Index at Newer Date) / (Cost Index at Older Date)]

Styrene Information
Older Price (Oct 2008)	$1014.13/mt (Chemical Weekly Price Report)
Cost Index at Newer Date (Aug 2018)	336.7 (Aromatics FRED PPI)
Cost Index at Older Date (Oct 2008)	303.6 (Aromatics FRED PPI)

Updated Price = $1014.13 x (336.7/303.6)

Updated Price = $1124.70

The actual price of styrene in August 2018 was $1120 (based on data from Intratec.us). The PPI adjustment was a reasonable estimate.