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Posted - 2015.06.25 22:46:18 -
[1] - Quote
Haatakan Reppola wrote:Legatus1982 wrote:There's no such thing as an item that is sold below cost unless in the very rare case of a liquidation attempt for one reason or another.
I think you're forgetting how to actually calculate cost. Just because tritanium sells for 5.12 isk for example (random number I pulled out of my ass don't take it literally) doesn't mean the cost of an item that inputs ten tritanium costs 51.2 isk each. Tritanium is in all actuality a FREE item if you can mine it yourself - or reprocess other items you loot into it.
If you think an item is being sold "below cost" you're probably either seeing liquidation (if it's just a momentary sell listing) or if it's consistent, they're probably getting the input elsewhere for cheaper than you are. The cost assosiated with minerals are either the price you pay to get it OR the price you can sell those minerals for. If you can sell 10 units of tritanium for 51.2isk (numbers from quoted post) or manufacture an item that use 10 tritanium and sell for 51isk, that item is sold below cost! Its irrelevant that you can mine it without using a single isk, the mineral still have a value.
The trouble is that there's no way to "short," mineral prices other than building things with your own under par. It is possible that the MIMAF producer is simply witless and doesn't realize the forgone profit (in which case, they're effectively dumping materials on the market to a kind of buy order - the demand for their module or ship priced under the market-sourced-cost), but it's also the case that, even if he knows what he is doing, that he realizes an intangible "profit," from the act of producing and selling things from the ground up. At which point he is perfectly willing to operate "at a loss," and subsidize his business with trade or missions, etc. What these players are engaged in is a kind of subsidy to their customers, but one they enjoy giving.
Incidentally, you can usually tell around patch-time that a surplus of production alts have been put to use speculating because thereafter we see predictable spikes in production at costs far exeeded by par. That is, they spend a lot more than would usually be necessary to produce things they believe will appreciate due to patch changes and new demand. So the curiosity of producing things and selling them at a great distance from material market value is one of the few ways to access a speculative short or long position on the market itself or at least market prices of produced modules relative to mineral production.
tl;dr: Minerals they mine aren't "free," but the miner can act as though their productive activity and consequential value is zero or even negative and they would do this because they value the activity itself and are willing to compete to subsidize the players who buy their wares below the mineral value floor. Now, off to check the hubs for stuff to reprocess. |