Do smelters really melt the coins today?
joebb21
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I would be really surprised if smelters do not have somebody on staff that can quickly sort through the stuff that comes in to see if they can make extra money...
Anybody have any experience?
Anybody have any experience?
may the fonz be with you...always...
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I knew it would happen.
This is what I've been told, although I have no experience with melting anything but the lead I used to wipe lead bends with.
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be surprised, but you shouldn't be.
<< <i>I would be really surprised if smelters do not have somebody on staff that can quickly sort through the stuff that comes in to see if they can make extra money...
be surprised, but you shouldn't be. >>
It's a simple numbers calculation. Is it worth having a guy look through stuff given what they would find and what it would take to extract extra value.
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Institutional buyers (like ETFs and the major investment banks) are the ones who make the market in silver. When they're not trading in paper, they're trading in LBMA "good delivery" bars. Those MUST be, by contract:
Fineness: minimum of 999.0 parts per thousand silver
Marks: serial number, refiner's hallmark, fineness, year of manufacture, weight[citation needed] (optional)
Silver content: 750–1,100 troy ounces (23–34 kg); 900–1050 oz t recommended
Recommended dimensions
Length (top): 250–350 mm
Width (top): 110–150 mm
Height: 60–100 mm
The big boys don't want and can't use anything other than LBMA bars. Even $1,000 face bags of 90% won't work on international exchanges.
--Severian the Lame
<< <i>We've approached this issue several times on the PM forum. My gut tells me it's being melted en mass.
Institutional buyers (like ETFs and the major investment banks) are the ones who make the market in silver. When they're not trading in paper, they're trading in LBMA "good delivery" bars. Those MUST be, by contract:
Fineness: minimum of 999.0 parts per thousand silver
Marks: serial number, refiner's hallmark, fineness, year of manufacture, weight[citation needed] (optional)
Silver content: 750–1,100 troy ounces (23–34 kg); 900–1050 oz t recommended
Recommended dimensions
Length (top): 250–350 mm
Width (top): 110–150 mm
Height: 60–100 mm
The big boys don't want and can't use anything other than LBMA bars. Even $1,000 face bags of 90% won't work on international exchanges. >>
Good info. I didn't know about this.
Interesting that they have a list of approved refineries and non-good delivery bars must be marked "NGD."
Silver:
Gold:
Save your 90%, folks. It's 50 years old and getting older every second, while every second piles of it makes its way to the crucible.
--Severian the Lame
I knew it would happen.
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<< <i>That's not to say 90% is being melted in massive quantities this week, or last week, or three weeks ago. If the premiums are high enough, the hands of the market will be guided to other less valuable sources (junk foreign silver coins, silverware, industrial waste, etc). But I feel pretty certain that the trend is 90% being melted consistently even when premiums are somewhat high, and I'd wager 90% gets melted by the trainload every time premiums dip. Even my tiny local B&M has a simple system of shipping everything he has by the xth day of the month to Ohio Precious Metals. Wouldn't you know it? OPM was added to the LBMA list in December.
Save your 90%, folks. It's 50 years old and getting older every second, while every second piles of it makes its way to the crucible. >>
Now if COLLECTOR demand could be ramped/matched up with declining availiability ,values for the remaining pieces may increase based on numismatic value, not bullion value (?).
<< <i>Back in the 1980's during the Silver boom , I remember BU Peace and Morgans turned in for melt. Many looked 65ish
I spent some time in the early 80's in the bowels of a refiner looking through silver dollars for better dates, so I can tell you all that it has happened at least once.
I melted nearly $500 worth at the refinery. They showed me the block and it was still warm. And refineries really do melt coins today. Yes.
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<< <i>I'm bumping this thread to see if anyone knows whether Platinum Eagles or Gold Spouses are being seen at the smelters. Anybody know? >>
Guy who runs a jewelery store frequents the same Starbucks I do. Ran into him today and asked him this. He is fairly knowledgeable about coins (went to a FUN show a few years ago when it happened to coincide with his vacation ). He has an arrangement with a B & M in a neighboring town who will sometimes buy a little of this kind of material, but most of it goes straight to OPM.
<< <i>I guess they do not want to be slowed down but I would think that if they wanted to maximize profits they would have a qualified numismatist on staff to screen coins for value over melt. I guess they figure that most of the sellers have already done that but I wonder how often that is not true. >>
It costs money to hire "a qualified numismatist" and it costs more money and time to get the numismatic value out of what they find. Just look at how long it takes a dealer to sell some coins and how many show they have to attend. Selling on eBay is not cost free either. To a smelter, it's not worth it.
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something like a BU roll of bust halfs isn't going to somehow get mixed in and if it did there's a near
certainty it would be caught. Dealers and melters keep an eye out for things they can easily flip for
a profit. The bulk is junk or near junk. Collectors will turn stuff in that's a little better because it's
easier than getting trying to get full value. Dealers might have a large overstock in something and
melt it despite getting less than full wholesale. People will want to capitalize on higher prices in a ris-
ing market and sell something they shouldn't. Of course some mistakes get in the mix and some
things that look like junk aren't.
Valuable items that get sold for melt and then actually get melted are usually a little esoteric or hid-
ing in junk.
I believe the premium for coin right now has reduced the amount getting melted. The exceptions will
be things with less premium like 40% and culls. When the price starts back up then you'll probably
see premiums come down and lots more coins flowing into the furnaces again.
It will be a very long time until the smelters have made a large dent in the availability of common US
silver coins. The melters will be working overtime for years before this happens.
this is such a silly conception that I can't really believe members think this way. it is reminiscent of a knowledgeable forum member who actually thought that 40% Kennedy Half-Dollars were melted and poured into 40% Silver bars. he wondered where the market was for that!!! these smelters/refiners are large industrial operations, they aren't Mom-and-Pop type places that do little lots. imagine how many coins might be in a typical 1000-2000 lb. melt lot and how long it would take a "qualified numismatist" to go through everything to pick out the "coins over melt" in the group. besides, the stuff was looked over and a decision made long before it got to the smelter.
<< <i>I guess they do not want to be slowed down but I would think that if they wanted to maximize profits they would have a qualified numismatist on staff to screen coins for value over melt.
this is such a silly conception that I can't really believe members think this way. it is reminiscent of a knowledgeable forum member who actually thought that 40% Kennedy Half-Dollars were melted and poured into 40% Silver bars. he wondered where the market was for that!!! these smelters/refiners are large industrial operations, they aren't Mom-and-Pop type places that do little lots. imagine how many coins might be in a typical 1000-2000 lb. melt lot and how long it would take a "qualified numismatist" to go through everything to pick out the "coins over melt" in the group. besides, the stuff was looked over and a decision made long before it got to the smelter. >>
Yes, but as I said above, it HAS been done and prices were a lot cheaper then.
Another thing - although I haven't yet seen such a thing, the concept of a sorter with image recognition is perfectly feasible now and would not be at all difficult. Try Google image search if you need convincing.
Picking out rare dates would be only slightly harder although condition would be much harder and probably not done (yet). With such a machine, you could squirt out the things possibly worth looking at and have someone in one a week to look them over. I don't know that anyone IS doing this now, but given how cheaply it could be done, I expect someone either is or will be soon.
<< <i>It will be a very long time until the smelters have made a large dent in the availability of common US
silver coins. The melters will be working overtime for years before this happens. >>
It's already been nearly 50 years since silver coins started being melted on a large scale, and smelters have often worked overtime as huge numbers of silver coins came their way. Melt rates became sufficiently high in the late 1960s that the government put a stop to it for a few years. And this was before the 1979-80 silver price spike, during which there were numerous reports of bags of uncirculated Morgan and Peace dollars hitting the melting pots, along with vast quantities of lower denominations. Since that time there have been many occasions when bags of 90% silver coins have traded for less than melt and have been sent to smelters rather than being sold to retail customers. The current premium on U.S. silver coins has been caused in part by their growing scarcity.
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<< <i>
It's already been nearly 50 years since silver coins started being melted on a large scale, and smelters have often worked overtime as huge numbers of silver coins came their way. Melt rates became sufficiently high in the late 1960s that the government put a stop to it for a few years. And this was before the 1979-80 silver price spike, during which there were numerous reports of bags of uncirculated Morgan and Peace dollars hitting the melting pots, along with vast quantities of lower denominations. Since that time there have been many occasions when bags of 90% silver coins have traded for less than melt and have been sent to smelters rather than being sold to retail customers. The current premium on U.S. silver coins has been caused in part by their growing scarcity. >>
The government put the ban on melting in effect only after the price of silver got
high enough to threaten the coins left in circulation. It was at this price that they
began removing silver themselves in mid-'68 after about 80% of it was already gone.
The government lifted the ban and melted the returned coins after the coins were
fully removed from active circulation. Few coins were melted privately in those days
because it wasn't economically feasible. The government made 90% bars and refined
some as well.
There continued little melting until about September 1979 when the Hunt brothers
were demanding delivery of good silver. All these deliveries were not 999 and they
did accept some coin in lieu of 999. Most of the melting was over by about March of
1980 but the refineries ran full out during this brief period.
Little melting occurred again until 2008 when the price went up. The refineries melted
significant amounts until it slowed down again about 18 months ago, per my understan-
ding. I don't have a good feel for how much has been melted recently but I'm guessing
it isn't a great deal. I'd bet nearly half of the mintage of 1963-D quarters survive. Uncs
have been melted prefentially to the junk from circulation because Uncs are more likely
to be owned by people aware of silver prices.
<< <i>The government put the ban on melting in effect only after the price of silver got
high enough to threaten the coins left in circulation. It was at this price that they
began removing silver themselves in mid-'68 after about 80% of it was already gone.
The government lifted the ban and melted the returned coins after the coins were
fully removed from active circulation. Few coins were melted privately in those days
because it wasn't economically feasible. The government made 90% bars and refined
some as well.
There continued little melting until about September 1979 when the Hunt brothers
were demanding delivery of good silver. All these deliveries were not 999 and they
did accept some coin in lieu of 999. Most of the melting was over by about March of
1980 but the refineries ran full out during this brief period.
Little melting occurred again until 2008 when the price went up. The refineries melted
significant amounts until it slowed down again about 18 months ago, per my understan-
ding. I don't have a good feel for how much has been melted recently but I'm guessing
it isn't a great deal. I'd bet nearly half of the mintage of 1963-D quarters survive. Uncs
have been melted prefentially to the junk from circulation because Uncs are more likely
to be owned by people aware of silver prices. >>
According to the book "The Big Silver Melt" by Henry Merton (MacMillan, 1983), around 65% of U.S. silver coins were melted, many illegally, in the late 1960's. This was well before the 1979-80 frenzy that saw additional huge numbers melted. Survival estimates of common U.S. silver coins on PCGS CoinFacts indicate that only a small percentage still exist.
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<< <i>
According to the book "The Big Silver Melt" by Henry Merton (MacMillan, 1983), around 65% of U.S. silver coins were melted, many illegally, in the late 1960's. This was well before the 1979-80 frenzy that saw additional huge numbers melted. Survival estimates of common U.S. silver coins on PCGS CoinFacts indicate that only a small percentage still exist. >>
I'd like to believe it but I sure don't.
It doesn't jive with anecdotal evidence and it seems unlikely the government
couldn't detect and suppress just vast illegality. Government melting figures
are available. Silver coins simply disappeared rather suddenly between mid-'69
and mid-'69 while the FED was pulling them. They went from about 15% of
circulating issues to near zero in this time.
If your source is correct then it would seem the '79 and '08 - '12 melts would
account for the rest.