Tradelands Economic Update – November 2022
November saw the return of stability for the Tradelands economy. We didn’t see an explosion of post-event activity at the end of the Halloween Event, in the way we did for the Aukai and Purshovian Events. However, we did see stable trends in nearly all sectors which is welcome news considering the turmoil of the spring and summer months.
M&G Steadily Gains
The best news for many will be the steady gains made on the M&G Index in November. This change is due in large part to stable demand returning for the Mining Sector.
This index is used to determine when it is a good time for mining companies to operate. Right now, profits for mining companies are up approximately 5% across the board, with those focusing on non-premium Coal production up by as much as 17%. This is a good time to start up a new mining company and collect as much Electrosteel as possible before the change to winter when it will become an unobtainable resource.
Mining profits have always been a tricky thing to measure because most mining companies do not reveal their earnings. Instead, the estimates provided in the previous paragraph are based on the overall fluctuations in supply and demand, which is an indicator of how many transactions are being performed. For example, lower selling amounts typically mean less inventory remaining due to selling, while fewer buyers means their demand was met or they got what they needed through another means. While we may not be able to predict the profitability of these groups, the stable increase of 3.88% means you can expect higher profitability in this profession if you seek to start your own company at this time.
Inyolan Oak Emergency
For the first time in 2022, Inyolan Oak has hit a default point on the stock exchange and was temporarily de-listed. This is not a good sign for the material and its future. However, it is currently trading above the price of Electrosteel, so it might not be a bad idea to start listing some of your inventory if you are a seller with a decent quantity.
Unless these material ends up on the Premium Merchant in December, you can expect that they will continue to be in demand for the near future, especially once the holiday furniture items are released. Inyolan Oak is unique due to its cosmetic appearance and title. This makes it a good investment choice, especially if other sellers have decided to hold their own reserves instead of listing it on the market.
Coal Normalizing
A couple of months back, the Coal market was destabilized when Premium Coal was introduced. The main issue is the two types cannot be mixed together which causes issues when trying to run coal-powered ships. This caused a major destabilization in prices, because the volume premium purchased coal was significant. However, we finally saw enough non-premium volume enter the market which has normalized prices back to the expected 310 per piece price point for November.
The decision to add Premium tags to items that are sold by the Premium Merchant looks like a permanent fix, not a temporary one. While Coal was the most visible because of its dramatic impact on in-game mechanics, other items such as Premium Woods are also seeing a similar level of stabilization, just muted due to the minimal impact it has on in-game mechanics.
The Wooden Bubble
Finally, the most alarming trend of the month is the bubble in the JSI Index that appeared immediately after the Thanksgiving Break. This index is an indicator for Timberfelling, Furniture, and Shipbuilding markets. This is usually a sign of a stock market phenomenon known as a Market Bubble.
In real-life, these occur due to a number of factors, but the most often cause is a overvaluation or speculative buying. These factors also exist in Tradelands but they take different forms.
Overvaluation is caused when someone performs a buying technique commonly called an “overpay” where they intentionally pay/ask for more than the material is worth. This is often stated plainly in the deal so it’s known to both parties that the deal is not fair.
The seconds type is speculative buying. This is when players purchase a material based on expected properties in the future. An example of this is purchasing premium woods using the Robux cost as a price point instead of the Doubloons value. It is also done when negotiating superior purchase positions during bulk trading, with the intention of removing the item from the market (e.g. keeping it in inventory) until an opportune time to sell for high value emerges.
This second type, overvaluation, is likely the cause of the phenomenon seen at the end of the month. This conclusion was reached based on the timing of the occurrence and the type of buyers for the material. All of them appear to be stocking up for the upcoming furniture update that is expected with the Christmas Event. Whether they are successful or not probably depends on how many new items (if any) are included in the list once it is made public.
