The loss in average quality level seems to be rounding down the decimal point. The ql of the items you get out seem to be the average of the items you put in, similar to combining items in your inventory. 10% of the items inside are destroyed every time the stockpile takes damage; there isn't a minimum amount of damage required for this to happen.
The Bulk storage bin can contain:
*rock shards
*cotton
*rags
*strings of cloth
*squares of cloth
*wemp
*logs
*planks
*shafts
*wood scraps
*peat
*nails
==Notes==
* Finished bulk storage bins can not be picked up, but can be pushed, pulled, and turned like forges and ovens.
* On failure, the plank is damaged and the ribbon is destroyed.