Friday, April 18, 2008

Market getting tighter

Because I started mineral trading on the large scale only about 2 weeks ago, I am not really certain about the source of this effect in my area; however, the markets in my regions of operation have been getting a little tougher.

First, although I have been trading around two of these regions for a couple of months, I have not been much of a moving force. I have farmed more miners in the some of these areas by providing local places to sell their minerals for a fair price, but nothing compares to the power of a freighter when it comes to the ability to more minerals to mineral trade hubs.

I believe though I have literally created furtile ground for my own competition. You see traders review the activity of their regions when they place buys and sells. You can tell which systems have active trading even if you don't "log" that activity. You can tell because of pricing and volume. In places where minerals move a lot, and where there is competition, the buy price and the sell price of your product will be very close to one another and the majority of buy orders will tend to be larger.

Let me try to explain how I might have affected this.

In an Industrial Ship, you have the means to place buys and move minerals to the order of 5 to 10 million units in productive mining systems without locking your assets up. Larger orders will get you stuck with tons of minerals that need hauling and no money, anything less and you are running around a aweful lot just to fill the cargo hold of your Industrial Ship. This size of buy orders doesn't draw very much attention in the active systems, because they generally get filled in a couple of hours or less. There is some safety in this. Being a small time buyer means that the big boys aren't worried about you nor your short term competition. Their larger orders will still get filled once your small order is done getting filled. Since most pilots can't baby-sit the market for much more than a couple hours each day, the hit they take is tiny. In productive systems, your order lasts 2 to 4 hours maybe, which literally means you are not interfering with the big boys' trading for at least 20 hours of that day. Ultimately, the big boys don't even register your existence.

In a freighter, you have the means to move greater than 80 million units of minerals in one load. Generally speaking, unless you have gobs of money. You don't want to let eiter your money or your mineral assets go stale. Stale assets do not make you any money, they just sit there going stale and moldy. So you want to size your buy orders just right, in each highly productive system I work in, I place buy orders hovering around this 80 million unit mark. Instead of placing giant buy orders in one system and waiting for it to get filled over a period of days, I place my buy orders so that I will hopefully have at least one or two full freighter fulls of minerals to carry to the mineral trade hubs. Keep in mind that a freighter is an awesome tool because of the size of its hold, but these ships moves very very slowly. It moves a lot slower than even the largest Industrial Ships. Flying around gathering minerals from all across the region and making stops at stations along my routes is a lengthy process. I try to streamline this process so I am going point-to-point without making several stops, and this helps increase my productivity. There is a tradeoff however.

Larger buy orders take much longer to get filled. In a perfect world with zero competition, my buy orders get filled in 4 or 6 or more hours in those same productive systems. Sounds great until you realize that other traders become more aware of my activities. I have more and more often discovered that my buy orders have only been filled incrementally, and when I take a peek at the market, their orders beat mine for price. Of course my miners have no loyalty, especially since they don't even know they are working for me. They sell their mineral to whomever offers the best price. I wouldn't ask them to do otherwise, but now because my buy orders are larger and last longer, I am running into competition with the other big boys, boys who are much much bigger than me.

Now scenario number two. Maybe more traders are excited about stockpiling minerals since the governments are no longer subsidizing fixed price ship sales (most notably shuttles) which essentially has placed a soft cap on the price of the low end minerals. Since traders can no longer buy thousands of these ships and melt them down into their mineral components, there is no longer anything which artificially holds the price of minerals to a limited range. These traders are banking on the value of minerals to skyrocket, even if only in the short term.

Then again, maybe the problem is both. Big traders trying to get their hands on lots of minerals, and my providing a roadblock to overcome in my regions and they having to continually beat my buys to get a hold of as much product as they can and bank it for later. I don't work that way, I continue to operate normally and I don't invest in long term commodities. I buy and I sell and I move and I provide. This is how I operate, but the extra competition is making the margin a little skinnier than it was just a week ago.

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