Fuel Blocks too cheap?

Fuel blocks seem to be too cheap. The economy is losing money on them even if some individuals think they are profiting.

Is this just the nature of economics?

Theoretically the cost to produce something should equilibrate to the opportunity cost of its inputs.

All fuel blocks are way under their input costs.

Meaning it’s more profitable just to sell the inputs.

I understand that if you make one of your own inputs you can “profit” on fuel blocks. But the economy still loses. Because you could have just sold the input at a higher price.

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It’s possible in the past people built up a huge supply of them, and suddenly CCP announced a change that made fuel blocks worth less. It’s still better for those people to sell at a loss than to not sell at all.

Good point.

I wish there was more data to figure this out. Like some itemized consumption rates?

I’m very interested in dabbling in Industry but for what essentially amounts to oil in eve to be so upside down…makes it confusing.

Ammo and fuel. Kings of consumption?

It doesn’t even have to be caused by a material cost change.
Big traders build stocks of lots of item, and sometimes they have to unload, simply to free up more cash. Traders don’t care what the material cost for something is.

Traders also chase each other’s tails, pressuring the price up or down, causing periodic cycles in value.

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I believe the massive ice mining fleets you see in high sec (and low) turn their ice into fuel blocks, rather than compress them. My guess is that fuel blocks sell quicker than compressed ice because there are more end-users. Even if they loss value making fuel blocks, the higher turnover means they make more total isk per day.

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I enjoy these answers.

They really help me to understand the “in-game” decision making of why the market looks so “flat”.

I also learned that I forgot to account for ME at 10%. So that helps turn it actually “profitable”.

But it still needs at least one resource provided by the player…which is sub-optimal.

An optimized (ideal) market, a player should not have to subsidize their work (producing the blocks) with additional input.

Everything in this game is too cheap from trit upwards. Botted into hell.

No, they are not. But they are marginal.

This is an artificial example, very specific to me. I make two flavors of fuel blocks based on closest available ice. My blueprints are maxed at 10 ME. Blocks are made in rigged but not maxed facility. If I bought all required raw materials at Jita sell price I might make an extremely thin margin on sale of blocks. But even with maxed trader, sales taxes likely make it a thin loss. That’s why I start with my own ice, as primary producer, to reduce input costs. Not using the term here in its proper sense of opportunity costs, simply input raw material costs.

In practice, it depends if you can actually sell those inputs. The benchmark price for inputs is usually the Jita buy/sell prices. But, if you can’t physically get there to sell, then for me, in practice, I might not get sales at all. That means the opportunity cost for me is actually zero. Technically, there is a sale option, but in practice it just isn’t there. Not in my two closest hubs.

Can’t speak to the cause and effect here but ease of sale is certainly one reason I make fuel blocks. Even though compressed ice would probably be my preferred market. The problem is, I have to find that market. My local trade hubs both deal in the “wrong” flavor of ice compared with the main one I mine. And I typically get much quicker sales if I take my higher volumes of compressed elsewhere. Which takes time. Dealing in the “wrong” fuel block by comparison is much less of an issue, but it is still an issue. (This is because fuel blocks are also used as inputs, not just for fuel, so people will still pick and choose by preference not just on price).

You can, with good reprocessing skills and maxed athanor (got both) generate more inputs for sale from processing ice. I do that processing, but compared with selling compressed ice, both the increase in volume haulage and the low unit price(s) further complicates the time-to-market dynamic - both in terms of time to get there and time for me to sell. So, again, selling compressed would be preferred for me, if I could do it locally.

This is where it gets really complicated. If you mine and process the ice, as I do, then you would think fuel blocks would be more profitable than selling either the ice or its components. They are not. This based on price of inputs I have to buy. (And assuming I would be prepared to long haul to market to sell them instead.) However. You do end up with spare inputs from processing ice because blueprints and ice composition are not in balance. (Strontium clathrates are your limiting input from ice). Now, if you value-add to those spare inputs, you can then make more money than just selling the ice components alone. But to do that… you need even more inputs. And keeping track as to how much money you are making from selling several products now - compared with the combined opportunity costs - is where EvE goes from game to job!

My reasoning for doing value-adding though, apart from excuse to put up a structure and play with it, is that if you look at those same hubs where I can’t guarantee to sell at Jita prices, I can get some inputs at much less than Jita buy. So, with patience and permanent buy orders, the dynamic changes again, and fuel blocks are back in my favor. Plus, I make some fuel blocks for myself, at cheaper prices than I can buy. But whether any of that is ever better than opportunity costs overall (depending on what discounted values you use for input material costs) … who knows ?!

I realized after OP that I forgot that and agree with you. Very marginal. I think about 50mil profit for 1.5billion inputs. After all taxes (and fees?)

Could be. I half-calculated, half-eyeballed it.

Where it potentially gets interesting ('cause I is a one person corp) is if I did one half of the primary production and someone else did the other half. Ice & PI. That way by swapping and/or bartering inputs it might be both more profitable and fun? But both could still produce fuel blocks if they wanted.

lol your posts are like Economics books, probably useful but hard to understand and has no eVE-world use.

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