Methodology by Product

A summary of the methodology used for each Intratec product line.

Price-Based Products

How are commodity prices calculated?

Commodity prices are calculated through structured data-processing pipelines that collect official trade data, transform it, and apply the appropriate modeling approach for each market and price type.

The calculation follows a monthly cycle with three main stages.

1. Gathering Data is collected automatically from national statistics bureaus, government agencies, international organizations, and market exchanges. Automated collectors run on source update schedules and pass through integrity checks. When a source requires manual capture, independent professionals and algorithms cross-check results.

2. Transformation Raw data is normalized — files and number formats are standardized, and values are converted to common currency and unit bases aligned with established market conventions.

3. Modeling Modeling validates gathered values, removes outliers, and applies the appropriate calculation method. Five approaches are used depending on the commodity, market, and price type:

Trade-based — derived from official international trade statistics after homogeneity checks; uses clustering to avoid basket effects
Formula-based — calculated from related commodities and economic indicators through regression models
Freight-based — netback or netforward prices obtained by subtracting or adding freight and insurance to other assessments
Manufacturing cost-based — estimates commodity operating costs using raw-material prices, utilities, labor, and overhead
Compiled — public-source price series formatted, statistically validated, and averaged over the month

After modeling, data goes through a multi-layer review comparing values against other sources, neighboring commodity specifications, trade reports from exporters and importers, adjacent time frames, and feedstock and derivative markets. If data does not reflect typical market behavior, modeled values are used instead of the raw-derived series.

What price types does Intratec publish?

The Primary Commodity Prices service publishes six distinct price types, each produced through a different modeling approach.

Price Type	Description
Unit value	Total trade value divided by total traded quantity — no statistical filtering
Transaction price	Derived from trade records filtered by minimum traded volume and cleaned with outlier-detection methods
Formula-based price	Calculated from related commodity prices and economic indicators using regression models
Netback price	Value returned to the loading terminal — another assessment minus freight and insurance
Netforward price	Value at the destination terminal — another assessment plus freight and insurance
Compiled price	Monthly average of a public-source price series, formatted and validated

In practice, these six types map to three market-facing categories: spot prices, long-term contract prices, and transaction prices. The modeling distinction matters because each type has different use cases and different sensitivities to data availability and market volatility.

A transaction price for a polymer filters out small or anomalous trades and uses robust statistical methods to represent typical market clearing levels — a unit value for the same commodity would include all trades without filtering and may reflect a wider range of transaction sizes and conditions.

How does Intratec handle delayed trade data?

Official government trade statistics are typically released with a lag of one to three months after the reference period. To ensure that monthly price assessments are available at the beginning of each month without waiting for final trade data, preliminary prices are generated using regression models built on related assessments that do not have the same lag.

These preliminary values are clearly labeled with a (P) status marker so users can distinguish them from final assessments. Once the official trade data becomes available in a subsequent monthly cycle, the preliminary estimates are replaced with final values.

Price data carries three status labels throughout the service — Final (Fi), Preliminary (P), and Forecast (F) — so the nature of each data point is always transparent.

Are short-term price forecasts included and accurate?

Short-term price forecasts are included for selected commodities and represent the most probable 6-month scenario as of the latest monthly update. Forecasts are generated from related commodity prices, economic indexes, and industry indicators, and are made available on Pro, Advanced, and Ultimate plans.

Forecast data is rounded to 2 significant figures, distinguishing it from historical and preliminary data which are rounded to 3 significant figures.

Forecast accuracy is actively monitored as part of Intratec's commitment to transparency and auditability — tracking forecast performance over time is described as a differentiator from standard data providers.

Production Cost Methodology

How does Intratec estimate production costs?

Production cost estimates are built from the bottom up — starting with an understanding of the manufacturing process itself and working through to a complete economic datasheet that covers capital investment, operating costs, and return on capital.

The methodology follows five stages.

Process learning — Intratec develops a technical understanding of the production process through bibliographical research covering patents, encyclopedias, textbooks, technical papers, and non-confidential licensor documentation. The technology is classified by maturity using a framework adapted from Technology Readiness Level logic.
Technical analysis — The plant is divided into ISBL (Inside Battery Limits — direct process units) and OSBL (Outside Battery Limits — supporting infrastructure). A preliminary design supports subsequent cost estimation.
Site and labor definition — Key process indicators are defined from material-balance work: raw-material consumption, utilities consumption, product generation. Operating and supervision labor needs are estimated.
Capital and operating cost estimation — Capital investment covers fixed capital (ISBL + OSBL + contingencies + owner's cost), working capital (receivables, payables, inventories, cash), and additional startup-related costs. Operating costs cover net raw-material costs, utilities, labor, maintenance, overhead, taxes, and insurance. Raw-material prices and wage rates are collected from official trade statistics and government wage data for the region studied.
Product value calculation — All cost components are combined with depreciation, corporate overhead, and an expected return on capital employed (ROCE) that varies by industry sector and technology maturity. The result is a product value representing the full economic cost of production under the modeled assumptions.

For an established petrochemical process with well-documented technology, process contingency might be set at the lower end of the 5%–30% range. For an early-stage pharmaceutical process with limited public data, process contingency and ROCE assumptions would both be higher to reflect greater uncertainty.

How accurate are Intratec's production cost estimates?

Intratec production cost reports are Class 4 budgetary estimates. This classification reflects estimates developed from conceptual-level designs — sufficient for investment screening and preliminary feasibility decisions, but not for detailed engineering or construction planning.

Class 4 budgetary estimates are characterized by:

Conceptual design basis — estimates are built from preliminary process designs, not detailed engineering drawings
Asymmetric uncertainty — underestimation risk is generally larger than overestimation risk, because unknown complications add cost more often than they subtract it
Cross-validation — fixed-capital estimates may be cross-checked against published investment data for comparable plants or adjusted from similar plants using time, location, and capacity scaling

Several factors can affect how closely a report's estimates match actual project costs for a specific plant:

Small process differences or omitted process areas
Overdesign for site-specific conditions
Rapid fluctuations in equipment or construction costs
Local taxes, fees, labor market conditions, and unforeseen construction challenges

The estimates are designed for comparison and screening purposes. Product value represents a projection of probable cost under standardized assumptions — not a guaranteed number for any particular construction project.

The preliminary design in each report is intended for cost estimation purposes only and should not be used as an actual process design or engineering specification.

What plant assumptions underlie Intratec cost reports?

All Intratec Commodity Production Costs reports are based on a set of standardized plant assumptions that make estimates consistent and comparable across different commodities and processes.

The default assumptions are:

Plant type: a typical large single-line clearfield plant (a new, standalone facility not co-located with existing infrastructure), unless the report states otherwise
Plant scale: sized to represent a commercially relevant large-scale production unit; the Premium edition also includes a plant capacity assessment covering costs at different capacities
Technology maturity: each process is classified by maturity using a framework adapted from Technology Readiness Level logic — maturity affects process contingency (5%–30% of ISBL), project contingency, startup inefficiency, and R&D cost assumptions
Location: operating costs are estimated using average raw-material prices and wage rates for the region studied, drawn from official trade statistics and government wage data

These standardized assumptions are what allow reports covering hundreds of different production processes to be compared on equal terms. When your specific project differs from these defaults — for example, a different plant location, capacity, or process variant — bespoke reports can be requested to reflect those parameters.

Industry Economics Methodology

How are the plant construction cost indexes calculated?

Plant Construction Cost Indexes (IC Indexes) are monthly composite indicators built from four parameter groups — labor, materials, logistics, and business environment — weighted and combined to reflect the relative cost of building a process plant in a given country at a given point in time.

Construction of the index

Intratec collects input data from national statistics bureaus, government agencies, international multilateral organizations, and market exchanges. The four parameter groups are:

Labor costs — wage rates, directly paid benefits, and other employment expenditures, adjusted for local productivity differences
Material costs — primarily steel prices and related construction material inputs
Logistic costs — infrastructure-related costs affecting construction execution
Business-environment costs — economic indicators such as inflation, exchange rates, and producer price indexes

These groups are combined into a weighted composite that reflects the overall cost level for plant construction in each country. The index is normalized to January 2000 = 100, so values above 100 indicate costs higher than the January 2000 baseline and values below 100 indicate lower costs.

How the index is used

IC Indexes are used to adjust plant capital costs over time — for example, to escalate a cost estimate from a historical reference year to current conditions, or to compare capital cost trends across periods.

If an engineering team has a capital cost estimate from 2015 for a plant in Germany, they can use the IC Index for Germany in 2015 and the current IC Index value to scale the estimate to today's cost environment.

How are industrial utility costs estimated by country?

Industrial utility costs for each of the 33 covered countries are estimated through cost models that combine labor cost data, construction-cost inflation, and energy cost inputs — not through direct price surveys.

The methodology distinguishes between costs that depend primarily on the capital investment needed to build the utility supply system (which drives labor and construction cost sensitivities) and costs that depend on energy prices as a direct input.

Three figures per utility

For each utility, the service may present up to three types of figures:

On-site cash cost — the operating cost when the utility is generated internally within the plant boundary
Off-site cash cost — the operating cost when the utility is generated outside and delivered to the plant
Contract price — the price paid under a supply contract with an external utility provider

Standard capacity assumptions

Each utility system is assessed at a defined standard assumed capacity, so estimates remain comparable across countries and over time. The 10 utilities covered are: compressed air, process water, demineralized water, cooling water, chilled water, steam, oxygen, nitrogen, hydrogen, and carbon monoxide.

Input sources

Utility cost models draw on energy prices from Intratec Primary Commodity Prices and Intratec Energy Price References, as well as labor cost data from national statistics bureaus and government agencies. This creates an internally consistent dataset where energy price changes in the Primary Commodity Prices service flow through to utility cost estimates in Industry Economics Worldwide.

Cross-Product

Each Intratec product uses a distinct methodology suited to the type of output it delivers. The methodologies are not interchangeable — they differ in data sources, modeling approaches, and the economic questions they are designed to answer.

Product	Methodology focus
Primary Commodity Prices	Price assessment through trade-based, formula-based, freight-based, manufacturing cost-based, and compiled modeling of official government trade data
Energy Prices & Markets	Price and market modeling for energy commodities, plus energy balance modeling, freight and insurance assessment, and global comparison metrics
Commodity Production Costs	Techno-economic analysis built from bibliographical research and bottom-up capital and operating cost estimation for specific production processes
Industry Economics Worldwide	Country-level composite indexes for plant construction costs and location factors, plus utility cost models, built from labor, materials, logistics, and energy price inputs

Across all products, certain principles are consistent: data is sourced from public and official sources, monthly cadence governs updates, governance standards emphasize integrity and independence, and methodology documents are publicly available.

The shared infrastructure also creates deliberate cross-product connections — for example, Industry Economics Worldwide utility cost models use energy price inputs from the Primary Commodity Prices and Energy Prices & Markets products, and production cost estimates in Commodity Production Costs draw on utility cost data from Industry Economics Worldwide.