ResourceWise is an independent and neutral third party. We do not buy or sell any of the commodities for which we provide pricing data. The methodology used to report commodity prices varies based on the product or service.
1. Transaction-based Pricing
Subscribers to SilvaStat360 and Recycled Fiber 360 provide transaction data directly from their internal systems into ResourceWise databases. Our data specialists then clean, aggregate, and anonymize the data. Once it meets all reporting standards, the data is released into our platforms, and we report it back to the companies that have contributed data.
Transaction-based pricing, also known as the give-to-get model, is the most reliable method for price discovery because it is based on actual transactions.
Because we report prices and produce benchmarks based on transaction-based data, ResourceWise is required to adhere to the U.S. Justice Department's anti-trust and "safe harbor" standards and European Union competitive guidance for cost benchmarking.
In order to comply with these standards, a firm must:
- Be independent
- Meet a volume threshold
- Require a minimum number of participants
- Report benchmarks with a time delay
ResourceWise abides by these standards and has received favorable opinions from regional, industry-experienced legal counsel for each of our product offerings.
2. Modeled Third-party Pricing
For some of our price points, specifically in Forestat Global and Wood Market Prices, we intake third-party data from government organizations and trade agencies and then report a price.
Trade data has always been a cornerstone of market analysis, but its inherent challenges have often made it a problematic resource to leverage fully. Raw trade data, typically obtained from country datasets, can be inconsistent and hard to interpret. These issues stem from various factors, including differences in how countries report trade volumes, weights, and units and discrepancies in how commodities are categorized and classified.
For Forestat Global, we have developed an algorithm to extrapolate prices based on regression. This solves the recency problem with trade data (trade data is usually reported about 2-3 months behind the current month). We source trade data from Global Trade Tracker, which receives it from open government organizations.
To address the inconsistencies and anomalies inherent in trade data, we developed a series of systematic algorithms that now run behind the scenes across our platforms. These algorithms are the backbone of our data-cleaning process, enabling us to standardize trade data across different countries and commodities.
For example, our algorithms harmonize data reported in various units—such as cubic meters, kilograms, or short tons—ensuring that all trade data is presented in a consistent and comparable format. This process also extends to other critical factors, such as moisture content in wood products. By applying density factors and other conversion metrics, we can align data reported on a bone-dry basis with data that includes moisture, creating a more accurate and reliable dataset.
We have also implemented a robust anomaly detection system that automatically identifies and corrects outliers in the data. Whether it's a trading volume much higher than it should be or a misreported transaction, our system can detect these issues and apply the necessary corrections. This level of precision is crucial for ensuring that the data our clients rely on is as trustworthy as possible.
3. Price Assessments and Surveys
For some of our services, including Prima CarbonZero, OrbiChem360, ChemEdge360, and WoodMarket Prices, we interview market participants, receive evidence of pricing bids, and then triangulate the data received with:
- “Word on the street” type of feedback regarding discounting
- Market fundamentals (market getting tight, soft, etc.).
To facilitate accurate, reliable, and timely price discovery, ResourceWise establishes named benchmark assessments for specific commodity grades at specific trade hubs. The parameters of each named assessment, including specification, dates, location, volume, and currency, are determined by ResourceWise staff experienced in benchmarking and indexation in partnership with industry participants.
ResourceWise's assessments are designed to accurately reflect the organic nature of price formation across the relevant pool of trade participants in each named market. Assessments are subject to initial and ongoing review and approval by ResourceWise's editorial team and management, taking into account the views of relevant stakeholders.
All assessments are undertaken by trained market analysts in strict accordance with ResourceWise's overarching published methodology. Individual assessments conform strictly to the specific parameters of location, quality, and timing laid out for each price point.
ResourceWise analysts gauge market conditions and shifts in market spreads daily, which drive direction in individual commodity markets. With this information, ResourceWise pricing analysts engage with market participants to establish the range and depth of trades, bids, and offers seen in the market. Communications are made by email, instant messenger, telephone, and face-to-face conversations.
For more details about the methodology of our specific services:
