How do you calculate a plastics or resin price escalation clause using the PPI?
Divide the current value of BLS series WPU066 (Plastic Resins and Materials) by its value at contract signing, then apply that ratio to the resin part of the price. Over the 12 months to September 2026 the ratio was 1.065. BLS also publishes thermoplastic, thermosetting and finished plastic products series, so naming the exact one matters more than usual.
A plastics or resin escalation clause ties the resin-related part of a contract price to a published index instead of fixing it at signing. The BLS producer price index for Plastic Resins and Materials, series WPU066, covers resins as a group. Two parts of it have their own series. WPU0662 is Thermoplastic Resins and Plastics Materials. WPU0663 is Thermosetting Resins and Plastics Materials.
Resins are made from oil and natural gas feedstocks, so resin prices can move with energy markets independently of demand for the finished plastic goods a manufacturer sells.
Plastic Resins and Materials against the WTI crude price, both set to 100 in the first month they share
Sep 2026WPU066 125WTI crude price 185
Sources: WPU066 (Plastic Resins and Materials); EIA via FRED, MCOILWTICO.
Since 2017, this index has followed the WTI crude price about one month later and moved about a third as far as it over a year.
Over the 12 months to Sep 2026, the WTI crude price rose 52.1% and this index rose 6.5%.
1 month
Lag behind the WTI crude price. Monthly changes line up best this far apart.
−15.4% to +55.2%
Range of 12-month changes since 2017.
16%
Share of months that moved more than 3%. The median month moved 1.23%.
The calculation, step by step
Base index value. The index value at the base period, usually the month of contract signing or bid submission.
Current index value. The index value at the adjustment date, usually the month of delivery or invoicing.
Ratio. Current value divided by base value.
Adjustment. The ratio applied to the plastics- or resin-affected portion of the contract price, not necessarily the whole contract.
Take a contract signed in September 2025 with $250,000 of plastic resin scope, invoiced in September 2026.
Base index, Sep 2025
259.393
Current index, Sep 2026 (revisable)
276.296
Ratio, 276.296 ÷ 259.393
1.0652
Amount at signing
$250,000
Adjustment added to that amount
+$16,291
Live figures from the stored series, updated when the provider publishes. Sep 2026 can still be revised, so a clause should say whether the invoice uses the first published value or is trued up later.
Where clauses go wrong
Wrong resin family. Thermoplastic resins (WPU0662) and thermosetting resins (WPU0663) are different markets with different price behaviour. Neither is interchangeable with WPU072, the finished plastic products series, which prices the manufactured good rather than the resin. Rubber products sit under a separate series, WPU071. Confirm which stage of the supply chain the contract buys before naming a series.
Over the 12 months to Sep 2026, these series moved differently. On the same $250,000, the gap between the highest and lowest is $2,531.
No averaging window. A single month's index value is more volatile than a 3-month rolling average. Clauses should state which is used.
No cap or floor. Without a cap, an index spike passes through in full, which can make the clause commercially unworkable in a large swing.
No rule for revised valuesBLS can revise each value for 4 months after it is first published. Right now that covers Jun 2026 to Sep 2026. Say whether the first published value is final for invoicing, or whether invoices are trued up once BLS revises it.
Split chips from the equipment that makes them. Chip prices index to BLS PCU334413334413, which has trended down over the last decade. Fab equipment indexes to PCU333242333242, which has trended up. A shared index will misprice one side.
The core formula is: adjusted portion equals covered portion multiplied by (current index divided by base index). The ratio of current to base index is the escalation factor. It is applied to the indexed part of the price, not the whole contract, and is usually bounded by a cap.
A cap limits how much the price can rise in an adjustment. A floor limits how much it can fall. Without a cap, the buyer carries unlimited upside risk. Without a floor, the supplier carries unlimited downside risk. Most working contracts have at least one.