What does the Price Index in the Index Builder represent?

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What does the Price Index in the Index Builder represent?

What does the Price Index in the Index Builder represent?

The Price Index shows how the cost of finished packaging material should have evolved based on the market price of the selected paper(board). It uses the Fastmarkets prices for those grades in the chosen region or country, based on where the paper mill is located. Fastmarkets' price reporters have determined a proxy* for regions/countries or grades that may not be covered by Fastmarkets' price reporting.

Many supplier contracts are fixed to the price of raw material, therefore, Fastmarkets' index is fixed to the material price only as well, while keeping the % breakdown between material, converting and overhead/profit identical over the time period selected.

Each month calculates as a comparison to the original starting contract month; calculations are not cumulative changes. Converting and Profit/Overhead/Other costs are fixed values (Fastmarkets does not have sufficient information to show their evolution), therefore the relative % share of finished product price may change.

*Price Basis/Proxy for market prices: Fastmarkets' price assessments are used for each cost driver. When a cost driver per region or country selection does not align exactly with an existing Fastmarkets price assessment, “PROXY*” is shown, as per guidance of Fastmarkets’ price/news reporters. Many cost driver/region selections will map to several proxy price assessments, specifically weighted to best capture market movement.