Steel is a hugely important resource, and not too long ago, the price for it shot up. It would continue to shoot up if it weren't for the artificial price cap of 135 set by Raw Material LLC.
I would argue that it is more free-market, beneficial to the economy, and just more fun with this price cap lifted. I'm guessing Raw Material LLC was created so that raw materials would be available at the beginning of the game, but we really have little need for it now.
We don't have enough steel producers to meet the demand, and we won't anytime in the future because the potential profit is very limited. Unless the price cap is lifted, it's likely that most of the steel will end up coming from Raw Material LLC for the rest of game, and that's just less fun. What if power was price capped at .12, or water at .12?
P.S. I only have one tiny factory, and don't produce much steel, so I don't have any personal investment in the steel market. I just hope to see the game experience improve for everyone!
The price of steel
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We will never have enough steel producers to meet the demand, even if the profit would be larger.We don't have enough steel producers to meet the demand, and we won't anytime in the future because the potential profit is very limited.
Steel is, in huge amounts, needed for expanding buildings. The bigger the company, the more steel they need. So the demand for steel will go expotential up with the time as companys grow. In the theoretical situation, that there are enough suppliers, these have to increase their producing capacity to meet this growing demand. And how do they do this? By expanding their factories.
Ok, the amount of steel which is needed to expand these factories might be to small to be a concern for the whole market but one fact remains. The increase in product-capacity per sqm goes down the bigger the factory gets. So the total demand of steel goes up extremly fast, but the time needed to increase the production-capacity gets larger at the same time.
So supply and demand will shift in two different directions over time, which leads to an increase in price. This is actually true for all materials, which are needed in expanding, because there the demand always goes up, where the demand in other materials depends on the production-capacity of the end-products.
But also because building new buildings and expanding existing ones is one important factor of the game, the prices for these products have to be capped with the NPC, to ensure that there is never a shortage of these crucial materials. (Same goes for water, power and seeds, as these are the basis for most/all other materials)
But compared to wood or stones, steel is special. The production of the steel is complex and the output is small, where the consumption of it in expanding is high. Because of this, steel reaches his price-cap much much quicker than stones or wood will.
The game administration had to find a balance between a high steel-npc-price, which would ensure that the demand would be longer meet by player-companys, and a low price, to ensure that expanding doesn't gets too expensive. They decided (probably after a long testing-period) to set this balance at 135caps/unit.
As a steel-producer the profit margin may seem to small if the steel is sold at 135caps/unit but the npc only sells steel q0. Steel is also used in the production of cars, computers and wardrobes. These products (especially wardrobes) ensure a demand for high-quality-steel. So if your profit margin is too small, do what all companys do, invest in resarching, to make more profit/unit.
Also, all products have a technical price-limit, steel is just known to reach his extremly quick (due to the complex production-process and the high demand as a building-resource).
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Re: The price of steel
Get another factory, and another ... if u think its worth investing time in it - make some money off the steel! Also try and find contracts to do, otherwise, that steel ur selling at 134 on the market, ur only getting 121 for...Pulk wrote:P.S. I only have one tiny factory, and don't produce much steel, so I don't have any personal investment in the steel market. I just hope to see the game experience improve for everyone!
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actually the products going into steel ARENT that expensive ... people just make them more expensive. The only problem with steel is that it takes a long time to make from scratch and has a lot of components which arent found in a 'gas' or 'wood' business. Steel has coal, iron, power, chemicals -minerals ... the time consumption is what ur paying for.
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i think raising the price of the npc to 200 ea is better.... and if you can make such big profits with steel you get more steel producers this way people are going to produce more steel too and the price will go down again. and yes people will need more steel and more steel, but at a certain moment they will produce their own steel ??? it is much cheaper than.... 
because you can produce steel under 50 ea if you make all ingredients yourself and big players like cheap steel this way they maybe gonna produce their own steel and the demand get less.
so just raise the price of the NPC and you will see it will get better with the steel supply.
because you can produce steel under 50 ea if you make all ingredients yourself
and big players like cheap steel this way they maybe gonna produce their own steel and the demand get less. so just raise the price of the NPC and you will see it will get better with the steel supply.
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this game runs with this rules in the german version for quite a long time, i think the authors know what they're doingWalthir wrote:Another solution would be to remove the NPC company based on rank. So the new comapnies still get reasonably priced steel, and the more experienced players have to live by market forces.
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I don't think anyone is questioning their abilities Drvic. This is a suggestion thread.Drvic enterprises wrote:this game runs with this rules in the german version for quite a long time, i think the authors know what they're doing
If the goal of the NPC Corporations is to ensure the availability of the core materials, that's a good thing. They do, however, have the unfortunate effect of governmental-price-fixing.
I'm new to the game and community so I may be way off-base here, but it seems that this is a free market simulator. If that is the idea, then the NPC resources need to be on a sliding scale, tied to a calculated market average. Otherwise, we are all simply competing with an entity which has no production costs and endless resources. It's impossible.
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Thanks JD Hetzer, that's exactly the point I was trying to get across that nobody is addressing.
I've calculated the ROI of steel, and it's really not that good, even at 135. If this artificial price cap were removed, it would enhance the free market, which is a good thing IF the game design were philosophically designed towards a free market, which it seems it is.
I personally don't have a huge emotional investment in keeping the cap or not - I'm merely suggesting that the steel industry could be made more interesting by having the cap raised or removed.
I've calculated the ROI of steel, and it's really not that good, even at 135. If this artificial price cap were removed, it would enhance the free market, which is a good thing IF the game design were philosophically designed towards a free market, which it seems it is.
I personally don't have a huge emotional investment in keeping the cap or not - I'm merely suggesting that the steel industry could be made more interesting by having the cap raised or removed.