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Comment by rwmj | Hacker News Reader

Surely if you flood the market with asteroid-mined minerals, then the price of those minerals will drop rapidly?

By not flooding the market. Sell at a rate which still turns a profit. Only issue is if there's so much mineral that it exceeds demand. But if that's the case, back to my initial point: refuse to sell at a loss; sell slower

Competition will bring the price down.

Only if it can bring the price down without making a loss.

The price is going to come down.

Kinda like the glut of oil reserves in the world. Everyone knows the time of internal combustion engines is drawing to a close and so they are trying to sell every barrel they have before barrels of oil become worth pennies.

Once enough people have asteroid material in orbit, the material cost will drop as sellers try to recover any value out of the market.

That’s only possible if there’s a bubble that causes total production to exceed demand-at-zero-profit. As this thread forked off a suggestion of nickel production, I looked that up — around 2,0000,000 tons per year right now.

If there’s enough production going on in space to bubble-and-pop at that kind of scale, I’d expect overcapacity to be used for construction of space habitats, not lowering prices below cost in a fire-sale.

Remember you likely have investors to answer to. They may sacrifice long term goals for short term ones. If you delay moving volume to capture as much profit as possible, you risk a competitor catching you and then you may not be in control of prices.

So you have enough of a material to flood the market and wipe out any competitor. What competitor is going to invest billions in trying to compete with you? To kill them stone dead all you have to do is turn on the tap. I think investors are going to understand the idea of maximising return on investment. It's not an unheard of concept in business.

From my limited understanding of the subject, unless we build something like orbital elevators, it will not make financial sense to bring the mined raw materials back to earth. However, as the linked article states, there are plenty of uses for water and hydrogen and oxygen in space.

In the very long term, I could imagine automated processing of metals on asteroids leading to 3D printing of giant space station parts. Then one could attach an ion thruster and send the parts to the their destination for final construction.

Getting stuff up into space is hard and expensive. But if you have a big chunk of metal in earth orbit it's not hard to get it down.

Once you have your rock in a stable Earth orbit you can aerobrake it down into low orbit and from there probably land it into some shallow sea.

Though possibly the asteroid would be more valuable in orbit than on Earth. It's hard to get materials up there!

I'm pretty sure the Tunguska event was an asteroid aero-braking into the ground. Where are you going to put the kinetic energy? Once it hits atmosphere there's not a lot you can do. Maybe attach a really big parachute.

The speed at which energy is released varies by altitude and speed. The Tunguska asteroid managed to reach just 10 km over the Earth's surface before exploding where the air is getting quite thick. What you want to do is rather than dive in head first just skim the atmosphere and drain your energy bit by bit. Once you're going slowly you can afford to go lower without burning up.

When astronauts return from space they have to carefully control how they descend and make sure that they don't get too low while they're traveling too fast. Otherwise they'd burn up.

Gliding/skipping entry is not feasible for such a massive, unpredictable and uncontrolled object. Both due to accuracy and aerothermodynamics. Thermodynamically speaking, entry angle is a trade-off between the peak heat load and the total heat received, and for the prolonged reentry the object has to be engineered to radiate much more heat away than with a steeper angle entry. Also, skipping entry is extremely inaccurate, and must be precisely controlled to achieve the desired result.

This all assumes that for some strange reason you’re dropping the whole asteroid rather than packets of pre-processed material which is what you’d actually do. As a bonus you could use some of the cruft from the original body to make heat shielding for the “parcels” to be used on reentry.

You can shape the thing so it slows down to a lowish terminal velocity. Think of a wide shallow cone shell with rounded tip.

Or even a hollow sphere.

Landing asteroids in the sea is a really bad idea if you care at all about either the ocean ecosystem, or anything you have on the coastline anywhere in the region.

Can you break off smaller pieces and parachute them down?

That must be why landing the space shuttle was such an easy and inexpensive problem.

To be fair, the "getting it down" the gravity well is easy and inexpensive, but "landing" it is a different problem.

There's nothing like the unique joys of spending tens of billions of dollars and decades to have your metallic asteroid burn up 90% of it's mass on reentry, the rest explodes over a wide area or sinks into the sea, and being arrested for use of a WMD.

Heat shielding for reentry is a solved problem, you will not lose 90% of anything, or have it explode.

Easy solution - just send down bigger asteroids, and drop them on whomever might object.

Easier solution - park the asteroids somewhere and have the nations of the world pay you not to.

Landing the space shuttle was hard because it used a crappy design for secret reasons. Technicians at the time tried to propose a sensible design instead, but obviously could not override this.

Also hard because of the requirement to have crew and not kill them, both of which go away when all you’re doing is dropping e.g. one ton cylinders of mildly purified gold wrapped in a steel tube.

Right now the world's entire mineral supply is worth X dollars.

If I acquire a bunch of asteroids and double the size of that supply, I now own X/2 dollars worth of minerals, instead of the zero dollars worth that I did before.

It is not 0 dollars to get the asteroid.

Maybe not. If the worldwide demand is N tons and the worldwide supply is estimated at 0.75 * N, then doubling the supply to 1.5 * N is likely to reduce the unit price by more than half.

For a simple example, consider the case of decorative diamonds today.

Price of diamonds is artificial, what is the problem with controlling supply of space minerals?

Diamonds aren’t a good example since their price is build on artificial scarcity and marketing. Dare I call this a straw man?

I think it’s an excellent example and the artificial scarcity is irrelevant to the point being made: total market value of all $substance is not constant when quantity of $substance changes.

The formal term for how the price of something changes when the supply changes is the elasticity of demand. Well, really that's the term for how the amount people buy changes with the price but if we assume the person with the asteroid lowers the price enough to sell all the metal it comes to the same thing. It's known to be different for different sorts of goods and different circumstances. For instance platinum is mostly used in catalytic converters and people don't tend to make more or less of those as platinum prices change so the price would probably go down quite a bit as more supply becomes available. I got that by googling "price elasticity platinum" and you can do the same for the other asteroid components you might want to sell.

As a dwarf fortress player I support this ≡message≡ about the use of decorative diamonds.

I think that if you were to make something like platinum group metals more easily accessible/cheaper, then there would be a lot more uses for them discovered as well. So while you would reduce the price for them massively, I think you could potentially create more demand for them.

As sibling comments have pointed out, you don't necessarily have to flood the market; but there are price regimes where it would make economic sense to do so.

Suppose it costs a terrestrial mining company $1000/ton to extract a material, and the price is $1005/ton, and you can bring the same metal down from space for $100/ton, and sell at $110/ton. Under this set of facts you can make a better margin than the terrestrial miners make, take over the whole market, and everybody except the terrestrial miners will be better off.

Your only competitors would be other space miners, and the capex/research investment required to set up a space mining operation would constitute a significant moat (though certainly not a permanent one).

Who knows if these hypotheticals are remotely close to how this will play out, but I think this is an interesting scenario.

Why the hell would you sell it for $100 when your nearest competitor cost is at a $1000. You would sell it for $990 and keep lowering the price slowly as you are able to satisfy demand at each price point.

Yes, there are strategies around how to optimally milk the period of price change. I was talking about the equilibrium state here.

The point I was making was that even if you cause a price drop by flooding the market, it might not be a bad outcome; you could end up making more profit than was being made by your competitors before you entered the market.

To your point, it's true that even if the equilibrium state isn't more profitable for an actor, they would still be incentivized to increase the supply if they could temporarily widen their profit margins while the price is changing (e.g. until the competitors can catch up). But I think that the equilibrium state provides a simpler working example of the general point I was making.

How has that worked for petroleum?

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