The document discusses the negative effects of survey-based market information for the paper recycling industry. It argues that survey results lack credibility, do not reflect actual prices paid, and are susceptible to manipulation. This creates artificial price volatility and strains trading relationships. The document promotes Forest2Market's transaction-based pricing indexes as an alternative that uses verified transaction data from industry participants, provides more standardized and detailed information, and avoids the problems of survey-based pricing.

1. ©2016, Forest2Market, Inc.
THE CRIPPLING EFFECT
OF SURVEY DATA
PAPER RECYCLING CONFERENCE
CHICAGO, ILLINOIS
2012

2. ©2016, Forest2Market, Inc.
SURVEY-BASED MARKET
INFORMATION:
NEGATIVELY AFFECTS
PERFORMANCE
2
Survey results lack credibility
The real price industry pays
Susceptible to manipulation
Strains trading relationships

3. ©2016, Forest2Market, Inc.
SURVEY-BASED MARKET
INFORMATION:
NEGATIVELY AFFECTS
PERFORMANCE
3
Survey results lack credibility
The real price industry pays
Do not reflect your experience
Cannot support decisions on any level

4. ©2016, Forest2Market, Inc.
SURVEY-BASED MARKET
INFORMATION:
NEGATIVELY AFFECTS
PERFORMANCE
4
Survey results lack credibility
The real price industry pays
Amplify the effects of marginal trades
Creates artificial price volatility

5. ©2016, Forest2Market, Inc.
SURVEY-BASED MARKET
INFORMATION:
NEGATIVELY AFFECTS
PERFORMANCE
5
Survey results lack credibility
The real price industry pays
Not codified; no standards
Creates artificial price volatility
Wreaks havoc with financials

6. ©2016, Forest2Market, Inc.
SURVEY-BASED MARKET
INFORMATION:
NEGATIVELY AFFECTS
PERFORMANCE
6
Survey results lack credibility
The real price industry pays
Variable & unknowable margin of error
Forget about forecasting

7. ©2016, Forest2Market, Inc.
SURVEY-BASED MARKET
INFORMATION:
NEGATIVELY AFFECTS
PERFORMANCE
7
Survey results lack credibility
The real price industry pays
Reflect market’s sentiment and forecast
Erodes decision-maker’s confidence

8. ©2016, Forest2Market, Inc.
WHAT DO WE KNOW
ABOUT THIS BUSINESS?
8

9. ©2016, Forest2Market, Inc.
WHAT DO WE KNOW
ABOUT THIS BUSINESS?
9

10. ©2016, Forest2Market, Inc.
WHAT DO WE KNOW
ABOUT THIS BUSINESS?
10

11. ©2016, Forest2Market, Inc.
DOES THIS DESCRIBE
YOUR BUSINESS?
Fragmented supply chain
Thousands of participants
History of antagonism between
buyers and sellers
National and international
influences
Commodity business that is
affected by local markets
High distrust of current pricing
services
11

12. ©2016, Forest2Market, Inc.
A HISTORY OF
DELIVERING VALUE
12

13. ©2016, Forest2Market, Inc.
A HISTORY OF
DELIVERING VALUE
13
2001: Stumpage Price Service

14. ©2016, Forest2Market, Inc.
A HISTORY OF
DELIVERING VALUE
14
2001: Stumpage Price Service
2006: Forest2Mill:
Raw Material Benchmarks
US South

15. ©2016, Forest2Market, Inc.
A HISTORY OF
DELIVERING VALUE
15
2001: Stumpage Price Service
2006: Forest2Mill:
Raw Material Benchmarks
US South
2007: Forest2Mill:
Raw Material Benchmarks
Pacific Northwest

16. ©2016, Forest2Market, Inc.
A HISTORY OF
DELIVERING VALUE
16
2001: Stumpage Price Service
2006: Forest2Mill:
Raw Material Benchmarks
US South
2007: Forest2Mill:
Raw Material Benchmarks
Pacific Northwest
2008: Forest2Fuel:
Delivered Price Benchmarks
Wood Feedstock Price Index

17. ©2016, Forest2Market, Inc.
A HISTORY OF
DELIVERING VALUE
17
2001: Stumpage Price Service
2006: Forest2Mill:
Raw Material Benchmarks
US South
2007: Forest2Mill:
Raw Material Benchmarks
Pacific Northwest
2008: Forest2Fuel:
Delivered Price Benchmarks
Wood Feedstock Price Index
2009: Mill2Market:
Lumber Market Analysis Service
Lumber Market Quarterly Benchmark

18. ©2016, Forest2Market, Inc.
A HISTORY OF
DELIVERING VALUE
18
2001: Stumpage Price Service
2006: Forest2Mill:
Raw Material Benchmarks
US South
2007: Forest2Mill:
Raw Material Benchmarks
Pacific Northwest
2008: Forest2Fuel:
Delivered Price Benchmarks
Wood Feedstock Price Index
2009: Mill2Market:
Lumber Market Analysis Service
Lumber Market Quarterly Benchmark
2011: Market2Mill:
Recovered Fiber Service

19. ©2016, Forest2Market, Inc.
HOW DOES IT WORK?
Transaction data only
• No survey, no calling
• Every customer transaction is reported
Standardized
• Collection and reporting (apples to apples)
• Audits
Participation required to receive data
• Data comes directly from customers (buyers and sellers)
Deep industry participation
• Target 90%
Meet DOJ Anti-trust requirements
19

20. ©2016, Forest2Market, Inc.
DATA:
UNSURPASSED DETAIL
Price
Freight
Origin
Type of seller
Type of buyer
Mode of transport
Miles
20

21. ©2016, Forest2Market, Inc.
RECOVERED FIBER
MONTHLY REPORTS
21OCC and DLK; MP and SOP next quarter

22. ©2016, Forest2Market, Inc.
RECOVERED FIBER
MONTHLY REPORTS
22
Contract and spot separated.
Simple reports based on a 42,423 verified transactions.

23. ©2016, Forest2Market, Inc.
RECOVERED FIBER
QUARTERLY BENCHMARK
23

24. WINNERS AND LOSERS?
24

25. ©2016, Forest2Market, Inc.
MILL IDENTIFIES HIGH
COST WINNER
25
$-
$20
$40
$60
$80
$100
$120
$140
Avg Mill 1 Mill 2 Mill 3 Mill 4 Mill 5 Mill 6 Customer Mill 8
OCC - Net FOB Sellers Dock
July 2012 - Chicago

26. ©2016, Forest2Market, Inc.
BROKER IDENTIFIES LOW
REALIZATIONS WINNER
26
$-
$20
$40
$60
$80
$100
$120
Avg Broker Mill 1 Mill 2 Mill 3 Mill 4 Mill 5 Mill 6
OCC - Net FOB Sellers Dock
August 2012 - Atlanta

27. ©2016, Forest2Market, Inc.
DIFFERENCES BETWEEN
WASTE STREAMS WINNER
27
$-
$20
$40
$60
$80
$100
$120
Commercial Single Stream
OCC - Net FOB Realization by Waste Stream
August 2012

28. ©2016, Forest2Market, Inc.
HOW DO YOUR FREIGHT
COSTS STACK UP?
28

29. WE HANDLE THE DATA,
WHILE YOU HANDLE YOUR BUSINESS.
29

30. ©2016, Forest2Market, Inc.
DATA
Data is submitted by all participants:
• Monthly data submission of prior month’s transactions
• Electronically submitted in any format (xls, csv, xml, etc.)
• Transaction level data from accounting or fiber systems
• Inbound purchasing/receiving transactions for mill
participants
• Outbound FTL scale transactions for supplier
participants
Forest2Market analysts quality check the data:
• Validation of receipt
• Fitness tests: volume norms, price norms, etc.
30

31. ©2016, Forest2Market, Inc.
DATA
All submitted data subject to periodic audits.
Data is secure.
Data is confidential; external/internal firewalls periodically
audited to ensure only authorized persons can access.
All reports adhere to anti-trust guidelines.
31

32. ©2016, Forest2Market, Inc.
CONTACT
32
Pete Stewart
President & CEO
+1.980.233.4011
pete.stewart@forest2market.com
Forest2Market
15720 Brixham Hill Ave
Suite 550
Charlotte, NC 28277