What types of price sources does WTP use?

WTP uses three types of sources for commodity prices, each with its own strength. Some ask producers for their prices every day or week. Some collect what was actually paid in real deals, and others follow prices on a public commodity exchange.

The three types

****	Producer quotes	Transaction data	Exchange (spot market)
How it works	The source asks producers for their prices or offers, daily or weekly	The source collects what was actually paid, from any data it can find	The material is traded openly on a public commodity exchange
Strength	The first to show a price change	Shows the real price, including discounts	Public, and the same price for everyone
Limitation	An offer is not always the price that gets paid	Comes later, because the deal has to happen first	Only exists for standard materials traded in large volumes

When each type fits best

Producer quotes follow the market closely. When prices move, these sources pick it up first.

Transaction data is useful in markets where producers rarely publish new prices. There, buyers and sellers mostly agree on discounts. The list price then says little, but the price actually paid does. Import and export data is one example of this type.

Exchange prices fit materials that are bought and sold freely in large volumes, such as many metals. Anyone can see the price, and it is updated every trading day.

Tips:

Comparing a quote-based series with a transaction-based one? Expect the transaction series to show the same change later.
In a market where discounts are common, a quote-based price can be higher than what you actually pay.
An exchange price is for a standard grade. Check that the specification matches what you buy.

For how we pick a source for each price, please see 'How does WTP choose the sources for its commodity prices?'