Market Discussions

Excellent, we're rolling, all slots now filled and soon enough we'll find out (after DT on the 25th June) whether forge average prices on 24th June met predictions or not.

I promised maths. To requote - I figured out something incredibly clever. This is dangerous as I'm liable to do something incredibly stupid (like, for example, bet the world 500m on my back-of-phone-bill maths) before I realise that what I initially thought was incredibly clever was actually incredibly stupid.

I think stupid stands a damn good chance :o)


Still. My starting position was to kind of decouple supply and, particularly demand, effects from hi sec mineral pricing and work on a basis that all hi sec ores eventually find an equilibrium in isk/hr due to the relative ease of switching from one ore to another in hi sec and the availability of good easy to use tools like Cerleste's Ore Table. History has shown hi-sec ores to track eachother in isk/hr *fairly* well, within 20% or so, over time - often with the exception of Omber, which is fruity for (personally) largely unknown reasons but could be the Materials For War Prep mission realising part of the ore's value, and could be something icky in Iso consumption.

So with that said, we need to start guestimating a figure for isk/hr achievable for hi sec mining, and the average m3/hr of say a solo hulk pilot. I started with a mining income of 20m isk/hr with hulks pulling 100k m3 per hour which equals an isk/m3 of $200.

So, if 1m3 of any given hi sec ore costs $200 then this means 1m3 of veldspar has a value of $200 - and with 30.03 units of trit in 1m3 of veldspar we can calculate that 200/30.03 and tritanium must therefore be $6.66.

What about scordite? Well, we're assuming 1m3 of scordite is worth $200 just like veld, and we know that for 1m3 of veld to be worth $200 trit must be at $6.66, we know that 1m3 of scordite contains 16.68 units of trit for a total of $111.09 in trit value, therefore the remaining $88.91 worth of scord value must be made up by the 8.33 units of pyerite; $88.91/8.33 gives us a price for pye of $10.67

Following on to plagioclase we know the same formula:
Price of plagioclase = (price of trit * quantitiy of trit) + (price of pye * quantity of pye) + (price of mex * quantity of mex)
We now just fill in the known variables as established already:
$200 = ($6.66 * 2.2) + ($10.67 * 4.39) + (price of mex * 2.2)
I'm sure we all did these sort of maths at school, we simplify:
$200 = $14.65 + $46.84 + (price of mex * 2.2)
In short, if 1m3 of veld costs $200 then trit must cost $6.66, and if 1m3 of scord costs $200 and trit costs $6.66 then pye must cost $10.67 and if 1m3 of plag costs $200 and trit costs $6.66 and pye costs $10.67 then mex must cost: $62.95

Onto pyroxeres:
Price of pyrox = (price of trit * quantitiy of trit) + (price of pye * quantity of pye) + (price of mex * quantity of mex) + (price of nocx * quantity of nocx)
$200 = ($6.66 * 8.45) + ($10.67 * 0.59) + ($62.95 * 1.2) + (price of nocx * 0.11)
To solve the pyrox formula the price of nocx must be $526.59

Kernite:
Price of kernite = (price of trit * quantitiy of trit) + (price of mex * quantity of mex) + (price of iso * quantity of iso)
$200 = ($6.66 * 0.8) + ($62.95 * 1.61) + (price of iso * 0.8)
To solve the kernite formula the price of iso must be $116.65

Leaving omber for last, as previously stated it's always a bit fruity. But we already know the prices of trit, pye and iso from the working above, so in a perfect world the value of 1m3 of omber using prices obtained above should equal $200 just like all the other ores. We don't live in a perfect world.
(1.02 trit @ $6.66) + (0.41 pye @ $10.67) + (1.02 iso @ $116.65) = a per m3 price for omber of $130.15 - if all other hi sec minerals provided 20m isk/hr then mining omber would only yield 13m isk/hr.

Now that fruityness with omber could either be seen as the exception that proves the rule or it could be seen as fundamentally breaking the whole approach. However the prices obtained, and the omber disparity shown, don't look entirely unfamiliar to us. We're making very dangerous assumptions in kind of ignoring the effects of demand and oversupply, or rather assuming that demand in the mineral basket is balanced just as the blend of minerals found in hi sec ore is. Very dangerous assumptions indeed.




If hi-sec mining provides 20m isk/hr, with all hi-sec ores reaching equilibrium at roughly the same m3 value:
Tritanium: £6.66
Pyerite: £10.67
Mexallon: £62.95
Nocxium: £562.59
Isogen: £116.65
(omber ends up making 13.02m isk/hr)

If hi-sec mining provides 25m isk/hr, with all hi-sec ores reaching equilibrium at roughly the same m3 value:
Tritanium: £8.33
Pyerite: £13.34
Mexallon: £78.69
Nocxium: £703.24
Isogen: £145.82
(omber ends up making 16.27m isk/hr)

If hi-sec mining provides 30m isk/hr, with all hi-sec ores reaching equilibrium at roughly the same m3 value:
Tritanium: £9.99
Pyerite: £16.01
Mexallon: £94.43
Nocxium: £843.89
Isogen: £174.98
(omber ends up making 19.52m isk/hr)

If hi-sec mining provides 35m isk/hr, with all hi-sec ores reaching equilibrium at roughly the same m3 value:
Tritanium: £11.66
Pyerite: £18.68
Mexallon: £110.16
Nocxium: £984.53
Isogen: £204.14
(omber ends up making 22.78m isk/hr)


Increasingly fruity figures I'm sure you'll agree, and running the very dangerous risk of ignoring strong upward pressure on nocx, potential oversupply of trit/pye and poor demand for iso. But let me put it this way - you currently make about 25% more isk mining pyrox than you do veld. I personally can't see that gap widening. The strong upward pressure on nocx simply must have an effect on other hi sec minerals.

You're several years older than me :o)

Can I ask how you resolve the "omber problem" (or whatever the red headed stepchild ore of a time is)? Can this simply be put down to the safety valve effect - ie. demands are driven by changing mineral weights of desired goods and one ore must always float free to accomodate changing FOTM - coupled with the variance in equilibrium (ie we never see perfect equilibrium)?

Interesting. If Block's right, I might as well pony up the cash today unless trit heads for the moon or the market hasn't settled out.

As for Tekota's numbers, I initially did the same excersise with similar results, but was not able to corelate my results against history. I realized that decoupling mineral prices from demand was my mistake. So long as you can't choose the mineral you want to mine, you (and every other miner out there) can only choose the ore that works best for the current markt conditions; but that ore will also supply other minerals that may or may not be in demand, while starving the market of minerals that are currently out of favor, preventing an equilibrium state.

IMO, that was yet another advantage of gun mining over ore mining. Gun miners get a more balanced mix of minerals in their random haul than ore miners get in their targeted ore.

Time will tell.

My thought exactly.

Too easy to skew the average price for the day. Only have to target the closest mineral that's on the wrong side of April 24th's prices.

Then again 50m is hardly worth the effort. You'd need a communal effort by all 10 participants to make it worthwhile.

So....

...for 30% of the winnings from each of you, I will perform this service if needed.

Thanks VaMei - had forgotten about the locks :o)


Ok, I've got to go into hospital in a couple of hours for what is slated to be a "two-three weeks" stay so this morning I paid out bet winnings to all takers on the assumption that mineral prices in eleven days time are unlikely to change much from their present values. If this should prove otherwise on the 24th you're all on your honour to forward my winnings :o)

So, final analysis: I was correct on nocxium prices, I was correct on pyerite prices, I was wrong on isogen prices. A 66% hit rate that puts me exactly 16% more precognisant than a blindfolded monkey randomly pressing buy/sell buttons and surely marks me as a modern day Nostradamus. You should probably all bow down lest I unleash my devastating psychic powers :o)

Yeah yeah all right, I was wrong :o)

And I refute any suggestion that my forthcoming operation is a last ditch attempt to surgically insert a sense of modesty.

To be fair to you, I'd probably have made the same Isogen call. Its just being annoyingly...stable.