Refined Metal: IS its value decreasing?

[Vince_]

"Discuss your thoughts on the current state of the economy in here." Alright, I shall. 

 

Note: Some of you are going to say that I'm stating the obvious. Well then, you don't have to read the text below.

 

Let's talk about Refined Metal. 

 

Refined metal is constantly being added. For free. Assuming only weapon drops, a player obtains a maximum of about 0.55-0.66 Refined metal per week (assuming 10-12 drops).

 

Crafting a hat is 3 Refined. Crafting a class-specific hat is 4 Refined and a token. Of course, most people, when they craft, use two craft hats instead. Craft hats are 1.33 Refined, so crafting a random hat is effectively 2.66 Refined.

 

Items such as keys, name tags, paints, craft hats, ToD tickets, etc. have gone up in price. I remember how Keys used to be 2.33 Refined (and probably a lot less when they first entered TF2). Name tags were 1 Refined, Black and White paints were 4 Refined, craft hats were 1 Refined, and ToD tickets were 1.33 Refined. (Again, some may have been worth less than that at some point in time.)

 

Of course, we will never run out of any of the above (besides After Eight and a Mann's Mint). They're all purchasable in the Mann Co. Store. And through Steam Community Market at a lower price (for some, but not all).

 

Now, someone might say, "But Vince_! You know that Outpost salesmen will highball the fuck out of keys et al!" Yeah, I know that. If the price on a website - be it backpack.tf, tf2spreadsheet.blogspot.com, or anywhere else - they're gonna sell for at least 0.11 or 0.22 Refined more. People, being unable

 

Think of it this way, though. Metal is like the dollar bill. More of it is created constantly, and it is used as the base for most transactions. Keys are like gold. While more of it is obtained, it retains its value. Bill's Hats, while they have risen and fallen, seem to be pretty stable at 8 Keys, despite Key prices going through the roof. (Buds aren't as stable, it seems.)

 

Also: On Paypal, keys are always around $1.30 (IIRC). Refined Metal has been dropping by a few cents (IIRC).

 

I want Valve to make a new "Golden Wrench" promotion - Golden Hats, one for each class. It can only be crafted with Refined Metal. That would help the inflation.

 

tl;dr Refined Metal's value is decreasing. Your thoughts?

 

P.S.: Your opinion =/= my opinion. If yours differs, be polite about it. Thanks for your time. Also, if someone else makes/made a similar thread, there were no threads in this section when I started typing this.

[lauraiys]

that's bad right

[elliott]

that's bad right

It raises the bar for entry level traders to get things they want, and screws you over if you hoard craft hats or refined. If your assets are in keys, buds, or glowies, you're only gaining value in terms of refined.

[Jymotion]

tl;dr & "on the fence answer" : Yes and No.

 

We cannot talk about the TF2 economy the same way we talk about a national economy because of the major differences in currency.  The currency in tf2 is refined metal, keys, bills, and buds.  However these currencies do not behave like standard currency like $1, $2, $10, $20.  Why?  Because TF2 uses commodities as currency.  That means that the items we use as currency have uses apart from just acting as currency.  Metal can craft hats/weapons, Keys can open crates, Bills and Buds can be worn on your character.  So, if I want to open a crate, I need a key and am willing to pay metal for it (and end up destroying it and removing it from the economy).  This doesn't exist in normal economies.  No one says, "I want a $5 bill so bad, that I'm willing to trade six $1 bills.  In this sense, a good currency is perfectly price elastic.

 

How exactly is this relevant to the discussion?  Well, since the currencies are not connected through perfect conversion rates, it is difficult to gauge the "values" of currency.  We price items with different currencies due to convenience and limited backpack space.  i.e. no one sells buds for 102 refined, they sell for 27.5 keys or 3 bills or whatever.  Here's an example:

 

then

1 key = 2.33 refined

now

1 key = 3.77 refined

 

What do we get from this?  Well, it looks like either refined is dropping in value or keys are rising.  If keys were rising (ie a key has more purchasing power thna it used to, and so it takes fewer keys to purchase something than it used to), prices in keys would drop.  Did this occur?

 

then

1 bills = 8 keys

now

1 bills = 8 keys

 

Hmm, no.  Now it looks like it must be that refined is falling.  If that is so, then metal would have less purchasing power and it would take more refined to buy things than it used to.  Through conversions, it looks like it costs more metal to buy a bills now.  but what about hats?

 

then

1 craft hat = 1.33 ref

now

1 craft hat = 1.33 ref

 

MY BRAIN.  Why is this?  Well, metal is locked into a stable position when it comes to craft hats because you can always craft a hat with 3 refined.  However, people aren't willing to take large amounts of metal in transactions for higher value items, so you need to convert to keys.  This is a flaw of the economy.  Key sellers figured out that there is very inelastic demand for keys (people will buy them regardless of price, kind of like gasoline and medicine) and began raising prices.

Does this mean key sellers are greedy and are getting rich?  It is tough to articulate whether or not that is true.  Sure, if they bought their keys at 3 ref and are now selling them for 3.77, they received more metal than they paid.  That means they can buy more craft hats than before and thus can be considered "richer".  However, when it comes to buying items priced in keys (bills, buds, EA, big kill, etc.), they have made no profit at all.  They bought 1 key with its equivalent in metal and sold the key at the later equivalent in metal.  They can buy exactly as many bills and buds now as they could before.

 

I'm not much of a cash trader, but intuition would lead me to believe that refined prices would tend to fall slowly over time (constantly being pumped into the economy for free through drops) and key prices would fluctuate based on supply.  Since, the supply is dropping due to the Steam Community Market, intuition would tell me that key prices would rise in this case.  I understand the metal market and cash markets are separate entities, but the ratio between metal and keys in dollars and metal should remain equal.  If it isn't it presents an opportunity for arbitrage (e.g. it takes 4 ref to buy 1 key, but it ref sells for half as much cash as keys.  arbitrage = exploit the system for profit until the system fixes itself.  buy keys with cash, sell key for ref, sell ref for cash, profit.)

 

Sorry for wall of text.

[Pintend]

Valve should make certain items in the game craftable through metal only, that'll even things up.

[Vince_]

then

1 craft hat = 1.33 ref

now

1 craft hat = 1.33 ref

 

Maybe my memory is wrong, but at least from my perspective, Craft Hats used to be 1 Refined when I started trading (around Australian Christmas 2011). 

 

Still, I read through what you said and I appreciate your words.

[Jymotion]

Maybe my memory is wrong, but at least from my perspective, Craft Hats used to be 1 Refined when I started trading (around Australian Christmas 2011). 

 

Could very well be true.  I was only trading for weapons at that point.  

My theory would be that price reached equilibrium as more craft hat buyers entered the market and competition grew.  In a huge market of buyers paying 1 ref, you need to differentiate yourself to get any sales, so you offer 1.11, then everyone follows until it reaches 1.33.  No one will offer 1.44 because saving one scrap per crafted hat isn't worth the effort.

[ste113rjay]

Refined metal is dropping down in USD value. My personal opinion for that is because, demand for metal is low. No one wants metal. People want shiny keys.

[MC22]

@ste113rjay

true.

Everyone wants keys. Ref is a secondary currency.

[Nickolas Cat]

Metal is easily obtainable because of weapon crafting which drop regularly, so it's normal they drop in value, but this is still annoying, having keys raise so much in a short time

[Synister]

As far as craft hats go, I feel that scrap.tf is the reason for the rise in that field.  Before that (or before it was well known) everyone would buy craft hats for 1.11-1.22, and you would see the occassional 1.33 if the person really wanted to craft (or wanted the hat itself).  With the addition of scrap.tf, there's not really a lower price now.  Anyone could take 2 seconds to sell their hat to an automated account for what used to be a semi-rare occurance.  Though, that's just my thought.

[The Killjoy]

I still buy craft hats for less than 1.33

It's not all the time, of course, but it happens occasionally.

[✔ P I X E L A T E D ✔]

Swarm me and murder me for saying this.

 

But... I have enjoyed this unstable market and prices, becuase to me, this is a game ( I know money and blah) but I have never spent a extra penny ( yes I'm British) apart from the 29 cents on the first weapon. This has been fun, simply because trying to find the hole where it does not add up. I started with bills, seeing as they were stable, easy to sell for keys. I bought it with ref, doing 8 x 2.66 = 21.33. Buying with that, people believed I was paying full price, but I was simply buying keys for 2.66, with 1 simple switch. Lately it has become a lot harder, I have to go through 4 or 5 switches until I come out with keys for a discounted price. My newest tactic - not going to say it However in a whole, theres all ways profit for people with whole backpack ranges, high or low.

[Jymotion]

that feel when no one read my explanation

[MC22]

tis what happens on a forum

[Rhys13th]

that feel when no one read my explanation

 

I read it. A few flags that popped up when reading it, but they were resolved. Not bad.

[gone_]

I'll just leave my explanation here:

 

 

Answer for the question: Why is Ref droping?

 

Factor 1: Key-USD = Stable

Factor 2: Key-Ref = Unstable / Keys rising

Factor 3: Ref-USD = Unstable / Ref falling

 

If the price of Keys is stable between 1.25-1.40 USD, and the amount of Ref you need for a single Key is increasing, then the price of Ref in USD is decreasing.

 

The price of ref is droping to sum everything up. If it doesn't fall we would have a big hole where everybody could make a ton of profit with RL-money.

Just remember of the price of $0.45 per Ref. 5 x 0.45 = 2.25 USD! That's why the price of Ref in USD is droping.

 

Sidenote: If one of the factors above isn't stable the keyprice in Ref would be rising or droping.

[Arry Waters]

Here's something to think about.

[F CHARLIE]

As far as craft hats go, I feel that scrap.tf is the reason for the rise in that field.  Before that (or before it was well known) everyone would buy craft hats for 1.11-1.22, and you would see the occassional 1.33 if the person really wanted to craft (or wanted the hat itself).  With the addition of scrap.tf, there's not really a lower price now.  Anyone could take 2 seconds to sell their hat to an automated account for what used to be a semi-rare occurance.  Though, that's just my thought.

One thing not mentioned much about scrap.tf is that it has pulled many hats down to 1.33 also.  Many people just want fast ref and ur 1.33 - 1.66 hat will work just fine.  I've seen hats in there that were higher in trading value then the 1.33 just the week before.