Tagged: ghost iron ore

As I predicted on Bitter and Salty, the market price value (MPV) for gathered materials continues to plummet. This is directly affecting the value of many of the higher-end, Mists of Pandaria (MoP) items in the game such as Living Steel, Dark Moon Faire cards, and flasks. In some cases, it’s not worth the trouble to craft these items because of the amount of time it takes you to process components at each level.

Living Steel was a hot commodity soon after MoP launched. Prices were extreme with single bars going for multiple thousands of gold. Then, on October 3, 2012, equilibrium was reached, and the MPV began to plummet. A post-equilibrium surplus such as the one Living Steel experienced a couple months ago can be an indicator of an aggressive loss of value. The market price for one Living Steel bar across all servers is now 476 gold. The price is even lower on high population servers (300-350 gold). Many players have probably bailed out of the Living Steel market altogether, frustrated with the fall in prices and reminiscing about easy gold-making.

This is not the time to panic, however. It’s the perfect time for some math! If you’re crafting Living Steel, then you’re an Alchemist specializing in Transmutation. If you’re not then you’re doing it wrong! If you are, then you’re watching the Ghost Iron Bar and Trillium Bar market. If you have access to a Blacksmith, then you’re watching the Ghost Iron Ore market. In reality, all of the markets are falling relative to each other, but the lowest tiered material is falling the quickest. You don’t want to ignore secondary and tertiary materials (the Ghost Iron and Trillium bars, in this case) as values on these will even out over time.

I’ve put together another spreadsheet using market prices published by The Undermine Journal for the Horde on Earthen Ring (US). The formulas within the spreadsheet calculate the cost to craft one Living Steel bar using one of the three components. As you can see in this example, the cheapest method, by far, is to use Ghost Iron Ore. However, we know that most Alchemists are lazy (especially Trolls), and they will buy the Ghost Iron bars directly off the auction house. An Alchemist would never buy the Trillium bars because they can transmute them with no cool down. Wait, what? You’re an Alchy and you buy Trillium bars to make Living Steel? Stop it.

MARKET PRICE COST TO CRAFT
Ghost Iron Ore Ghost Iron Bar Trillium Bar Living Steel
Price 1.57 4.39 48.04 318.75
Qty x GIO 1 2 20 120
Cost (GIO) 1.57 3.14 31.44 188.63
Qty x GIB 1 10 60
Cost (GIB) 4.39 43.90 263.41
Qty x TB 1 6
Cost (TB) 48.04 288.25
ACTION Craft Living Steel!

Simply put: f the cost to make a Living Steel bar is less than the value of the bar itself, go ahead and make it. However, I also take into account the values of the ore and bars in-between so that a sudden spike in Trillium Bar cost/value (for example) would put a stop to what I like to call my “Living Steel Dailies.” Oh, and this does not factor in a transmute-spec’d alchemist’s change to proc bonus Living Steel bars, of course. That’s just pure, unadulterated profit at that point.

My initial foray into the ore shuffle in Mists of Pandaria has been completed with some success. I wouldn’t say that this is overwhelming enough to make this my primary source of income, but I have concluded that it is profitable.

I did end up growing somewhat impatient with my sales, but this is partially due to my inability to remain patient and the large amount of supply that is currently screwing with the market. My philosophy with the auction house is to endure all others, so I will keep posting new auctions, re-listing, and buying out cheap materials daily.

In terms of the ore shuffle itself, here was my TLDR bottom line:

Materials Cost: 2,770
Confirmed Sales: 2,844
Total Sales: 3,950
Profit 1,180

My “Total Sales” is the sum of confirmed sales and my current AH listings where I’ve severely undercut both the average and market price.

At this point in the game, my plan is to use the ore shuffle to level my Jewelcrafting for free. I can achieve this by selling off most of the Sparkling Shards and rare, uncut gems. I can then take the uncommon, uncut gems and use them to level and discover recipes.

I will also use some of the materials to craft jewelry for my Enchanter to disenchant and use to level up Enchanting. Enchanting is going very slow for me in MoP, but utilizing the ore shuffle should increase this significantly.

The disappointing part of the experiment was the fact that the potential profit was not even close to being realized. This is the problem that I continue to have with the get-rich-quick schemes. Actual sales data in World of Warcraft does not exist to the public. Market data is made up solely on potential, thus increasing the amount of risk for players. Remember in my first post, I had calculated a profit of 5,771 gold?  I only made 20% of that.

So what to do with this information now? Well, I can continue to load in current data into the spreadsheet or modify the calculations to assume a 60%-80% drop in expected profit. My plan, however, is to simply watch the price of Ghost Iron Ore and monitor the supply and demand of uncut rare gems. The value of any rare, uncut gem should equal the price of a stack as you typically receive one rare when prospecting an entire stack.

If the average price of all uncut, rare gems is above the average price of a stack of Ghost Iron Ore, sell all the gems at their market price and buy the ore. If the price dips below, then cut the gem for leveling or for alts, or wait until there’s an opportunity to sell.

One of my favorite gold-making routines in Cataclysm was shuffling ore. Even if you consider yourself to be an average gold-maker in World of Warcraft, I’m sure you’ve heard of the ore shuffle. In Mists of Pandaria, the ore shuffle has returned, but with high volatility. However, there are tools out there for you to use to help you decide on whether or not it’s worth your while to participate in this gold-making scheme.

The basics of ore shuffling has been covered many times over on the Internet. If you are still not familiar with how it works, you basically use your Jewelcrafter to prospect various types of ore, and perform certain tasks with the prospected materials to turn a profit. These tasks can be as simple as crafting a rare gem, or constructing an item for disenchanting or selling on the auction house.

The Golden Crusade released an excellent guide that includes a spreadsheet that will help you determine whether or not it is profitable for you to shuffle your ore. The instructions are detailed enough, but you’ll need to create an account with the Undermine Journal before you can access the market data for the particular realm you are trying to retrieve data for.

One point to note: the market data that you download and import into the Excel spreadsheet is not used to calculate your profit. It is only there as a reference for you so that you can determine what amount you are comfortable paying for the various types of ore.

So guides on the Internet are great and all, but what about reality? The Golden Crusade outlined sample results when using 100 stacks of Ghost Iron Ore at 200 gold a stack. At a cost of 20K gold, a profit of 4.3K gold was made. Sounds awesome, right? Yeah! However, instead of using the spreadsheet to speculate and calculate, I’ll be using actual values from the Earthen Ring (US) Horde market.

Here are the prices I paid for the ore using actual cost and market prices:

PRICE QTY PPI DATE
115 20 5.75 10/8/2012
115 20 5.75 10/8/2012
115 20 5.75 10/8/2012
115 20 5.75 10/8/2012
115 20 5.75 10/8/2012
109 20 5.45 10/8/2012
109 20 5.45 10/8/2012
109 20 5.45 10/8/2012
109 20 5.45 10/8/2012
109 20 5.45 10/8/2012
110 20 5.5 10/8/2012
110 20 5.5 10/8/2012
110 20 5.5 10/8/2012
110 20 5.5 10/8/2012
110 20 5.5 10/8/2012
110 20 5.5 10/8/2012
110 20 5.5 10/8/2012
110 20 5.5 10/8/2012
110 20 5.5 10/8/2012
110 20 5.5 10/8/2012
110 20 5.5 10/8/2012
110 20 5.5 10/8/2012
110 20 5.5 10/8/2012
110 20 5.5 10/8/2012
110 20 5.5 10/8/2012

This works out to a total of 25 stacks (500 ore) at a total cost of 2,770 gold (at 5.54 gold per ore). The Undermine Journal reported a market price of 5.95 per ore on October 8, 2012. So, in theory, I already made 205 gold based on buying the ore below market price. If I used the spreadsheet, though, I have a potential profit of 5,771 gold. Hooray! Wait, what? That’s not how it works? Okay.

So now it’s time to prospect! I will report back on my ore prospecting yields this week and break down the actual materials gained from the ore and compare them to the spreadsheet.