The amount of damascenes that you can get from the forges is limited only on how much EC you personally have while the cheaper ones depend on the availability of it in the market. Unfortunately, I don't see many people selling large quantities at once and some people require a lot of damascenes for their recasts.
This exactly.
Forges are unlimitted amounts.
Player supply is limitted.
Buying from players is also more work than crafting at a forge. This extra work has to be covered by the ores being cheaper. As a side effect the (almost) unlimitted demand for damascene ores is also what's keeping supply tokens valuable. (I think.)
When you decrease the price for damascene in the forge it'll also decrease the price players can ask for them. As a side effect of that supply tokens become less valuable and we're back at the exact same "problem" you mentioned in the original post, except with different numbers.
