The big stumbling block to producing Azbel Engineering Complexes is simply capital. ISK to buy the blueprint and then ISK to buy the materials to build one. Any high sec NPC station or properly equipped Raitaru can build them.
So its no surprise that the going price for Azbels in the Jita has dropped to below reasonable profitability levels for my small operation.
The supply has continued to increase as more producers came online, and I'm willing to bet demand cluster wide has dropped as the number of corporations looking to own an Azbel for their needs have purchased them already; unlike citadels there is not a low level constant need for them as forward operating bases. Couple that with new producers making use of the material reduction bonuses of Engineering Complexes in null sec and low sec and we can see why the price continues to fall.
And all of that assumes that current producers are taking into account the actual cost of input materials and not using the "if I make it then its free" fallacy.
In the end I'm left with two options: either find a way to cut costs or halt production.
On the first option I'm already building out of a Raitaru with T1 rigs in high sec which gives me a 1% reduction of materials, so the next logical step would be to move into low sec and start producing at an EC there. The downside is that it would complicate logistics and still not make me as efficient as null sec producers with their better rig bonuses.
For the second option, I could halt production until the market self corrects as other casual producers like stop production and the supply drops, slowly driving prices upwards. This assumes that null sec producers making the most profit don't pick up the supply slack.
Based on experience in other high value item markets I'm going to be patient and wait and see while following option 2. I've got two Azbels on the market I'm looking to see if I can move for decent profit and will keep an eye on things. In the meantime, I might look into producing fuel blocks for the growing structure environment of New Eden.
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Production in hisec or lowsec was never going to be profitsble in the long term anyway (for portable high value items). Once the production cost savings outweight the freight costs, there's no point producing the goods anywhere but nullsec.
ReplyDelete(but here's hoping :)
DeleteYou can thank the war on high sec industry started with Crius. The RMT cartels and their lackeys (or is it devs getting kickbacks?) have completely wiped out high sec industry.
ReplyDeleteIt is no surprise that goons commanded CCP to stop publishing economic numbers. With the new ISK press called the Rorqual in place, no way goons / CCP want the general public to see how bad the skew is between high sec potential profitability and null sec.