#2 Copper & Coinflation

[adagirl]

Question: since US copper pennies are 95% Cu, they would be considered #2 copper. As such, if the melt ban was lifted, the melt value listed on Coinflation for the copper penny is not accurate, am I correct on this? I believe the prices shown on coinflation are for #1 copper.

[natsb88]

The price shown on Coinflation is the COMEX spot price. Scrap prices are lower, and vary from yard to yard.

[adagirl]

This is what I thought. So in effect, the coinflation price for Cu pennies is "inflated" relative to what one could expect to earn from a scrap yard. And Ebay listings etc. of "melt value" are misleading since Cu pennies would be rated #2 copper by yards since the pennies only contain 95% Cu.

[willy13]

i would not sat they are misleading. thet are simply calculating melt value based on spot. (.95 x copper spot) + (.05 x zinc spot)

[joemac]

I don't believe you have a good understanding of the copper grades. Bright stripped copper is stripped wire, very shiny-100% copper though. #1 is the next grade and it is mainly clean pipe. Doesn't have to be shiny, just not corroded-100% copper. Lastly #2 is everything else. The nasty green and black corroded stuff. But again 100% copper. Since 82 and prior pennies are not pure copper, their category has not yet been determined. The most right answer is that when they are legal to be melted, the smelters will develop a grade for them.

[ScottyTX]

This is what I thought. So in effect, the coinflation price for Cu pennies is "inflated" relative to what one could expect to earn from a scrap yard. And Ebay listings etc. of "melt value" are misleading since Cu pennies would be rated #2 copper by yards since the pennies only contain 95% Cu.

From that perspective, one could easily say that coinflation prices are also quite a bit inflated from what a refiner is willing to pay for 90% silver coins. Comex prices are just a baseline in which to meausre the price of the corresponding commodity. In the end, something is worth what another is willing to pay. I know many of us are not judging the price of silver (90%, bars, rounds whatever)based on what the refiner will pay as they trade quite a bit higher than that, I would assume the same might/would be true of copper pennies in the future. Yeah sure taking them (copper pennies) to the scrap yard if/when melting is legal again is a quick buck..... but in my mind there will be ample oppertunities to trade copper pennies in which actually melting them would not be their final destination. Personally I believe if your ultimate plan is just to turn a quick buck then yeah you should buy according to what you can dump them at the scrap yard for.................

Scotty

[adagirl]

I don't think coinflation is necessarily misleading. What I am saying is sellers of 95% Cu that promote a key selling feature as the melt value of $X are misleading possible customers. To be more accurate in their sales pitches, it seems to me that the ethical thing to do is inform your prospective buyer that a 95% Cu penny is considered #2 copper and if the melt ban was lifted it is unlikey you would obtain a price near the "spot" price listed on coinflation.

[ScottyTX]

I don't believe you have a good understanding of the copper grades. Bright stripped copper is stripped wire, very shiny-100% copper though. #1 is the next grade and it is mainly clean pipe. Doesn't have to be shiny, just not corroded-100% copper. Lastly #2 is everything else. The nasty green and black corroded stuff. But again 100% copper. Since 82 and prior pennies are not pure copper, their category has not yet been determined. The most right answer is that when they are legal to be melted, the smelters will develop a grade for them.

This topic has been beat to death in the past, and our best guess/estimate is they will be considered #2 copper when/if they will be able to be melted. This has been verified by several people in the past years at their local yards. I would say that 95% copper pennies would fall into the #2 category or at least be right in line with the prices that are being offered for #2 copper at the time.

[adagirl]

This is what I thought. So in effect, the coinflation price for Cu pennies is "inflated" relative to what one could expect to earn from a scrap yard. And Ebay listings etc. of "melt value" are misleading since Cu pennies would be rated #2 copper by yards since the pennies only contain 95% Cu.

From that perspective, one could easily say that coinflation prices are also quite a bit inflated from what a refiner is willing to pay for 90% silver coins. Comex prices are just a baseline in which to meausre the price of the corresponding commodity. In the end, something is worth what another is willing to pay. I know many of us are not judging the price of silver (90%, bars, rounds whatever)based on what the refiner will pay as they trade quite a bit higher than that, I would assume the same might/would be true of copper pennies in the future. Yeah sure taking them (copper pennies) to the scrap yard if/when melting is legal again is a quick buck..... but in my mind there will be ample oppertunities to trade copper pennies in which actually melting them would not be their final destination. Personally I believe if your ultimate plan is just to turn a quick buck then yeah you should buy according to what you can dump them at the scrap yard for.................

Scotty

I have no plans to dump my Cu penny stash. I am thinking more of the newbies who are taking the coinflation price or "melt value" as literal. Ethically I think we have some resposibility in educating new comers.

[adagirl]

I don't believe you have a good understanding of the copper grades. Bright stripped copper is stripped wire, very shiny-100% copper though. #1 is the next grade and it is mainly clean pipe. Doesn't have to be shiny, just not corroded-100% copper. Lastly #2 is everything else. The nasty green and black corroded stuff. But again 100% copper. Since 82 and prior pennies are not pure copper, their category has not yet been determined. The most right answer is that when they are legal to be melted, the smelters will develop a grade for them.

This topic has been beat to death in the past, and our best guess/estimate is they will be considered #2 copper when/if they will be able to be melted. This has been verified by several people in the past years at their local yards. I would say that 95% copper pennies would fall into the #2 category or at least be right in line with the prices that are being offered for #2 copper at the time.

Yep, it has been beat to death on here and the best estimate is that the 95% Cu pennies would be considered #2.

[ScottyTX]

[quote="adagirl] I have no plans to dump my Cu penny stash. I am thinking more of the newbies who are taking the coinflation price or "melt value" as literal. Ethically I think we have some resposibility in educating new comers.[/quote]

I completely understand your point there but.... Bullion metals are most commonly traded +/- to their actual spot price. There is not a huge market to guage what the +/- to spot price is. Copper pennies at this time do not follow the +/- spot/melt price currently. I believe that refenencing their value in actual metal content may be the only way to currently assess their value??? In fact, I would argue that it would "almost" be bad business to refer to copper pennies to, what one could scrap them at the yard for, as it is currently illegal to do so. I'm just arguing the other side as I do see your point, but I believe your point is based solely on the assumption that the pennies will all trade in the future based on what you take them to the scrap yard for and I call foul on that one.........

Scotty

[ed_vantage17]

From that perspective, one could easily say that coinflation prices are also quite a bit inflated from what a refiner is willing to pay for 90% silver coins. Comex prices are just a baseline in which to meausre the price of the corresponding commodity. In the end, something is worth what another is willing to pay. I know many of us are not judging the price of silver (90%, bars, rounds whatever)based on what the refiner will pay as they trade quite a bit higher than that, I would assume the same might/would be true of copper pennies in the future. Yeah sure taking them (copper pennies) to the scrap yard if/when melting is legal again is a quick buck..... but in my mind there will be ample oppertunities to trade copper pennies in which actually melting them would not be their final destination. Personally I believe if your ultimate plan is just to turn a quick buck then yeah you should buy according to what you can dump them at the scrap yard for.................

Scotty

Caveat Emptor. There's a reason this particular Latin phrase has worked itself into common English and I think it's applicable here as well.

[jasmatk]

copper+zinc=brass

so pennies are brass a very high quality brass but still brass.

[adagirl]

copper+zinc=brass

so pennies are brass a very high quality brass but still brass.

excellent point. I have seen others refer to the 95% pennies as brass, and in some markets these little brass pieces being worth more than the coinflation value!

[adagirl]

From that perspective, one could easily say that coinflation prices are also quite a bit inflated from what a refiner is willing to pay for 90% silver coins. Comex prices are just a baseline in which to meausre the price of the corresponding commodity. In the end, something is worth what another is willing to pay. I know many of us are not judging the price of silver (90%, bars, rounds whatever)based on what the refiner will pay as they trade quite a bit higher than that, I would assume the same might/would be true of copper pennies in the future. Yeah sure taking them (copper pennies) to the scrap yard if/when melting is legal again is a quick buck..... but in my mind there will be ample oppertunities to trade copper pennies in which actually melting them would not be their final destination. Personally I believe if your ultimate plan is just to turn a quick buck then yeah you should buy according to what you can dump them at the scrap yard for.................

Scotty

Caveat Emptor. There's a reason this particular Latin phrase has worked itself into common English and I think it's applicable here as well.

Right you are! Pennies are an entry point for some new collectors.... I guess I had just hoped for a higher level of ethics. But when you look at other things people state and try to sell on Ebay, Caveat Emptor probably best summarizes what all collectors need to heed.

[adagirl]

[quote="adagirl] I have no plans to dump my Cu penny stash. I am thinking more of the newbies who are taking the coinflation price or "melt value" as literal. Ethically I think we have some resposibility in educating new comers.[/quote]

I completely understand your point there but.... Bullion metals are most commonly traded +/- to their actual spot price. There is not a huge market to guage what the +/- to spot price is. Copper pennies at this time do not follow the +/- spot/melt price currently. I believe that refenencing their value in actual metal content may be the only way to currently assess their value??? In fact, I would argue that it would "almost" be bad business to refer to copper pennies to, what one could scrap them at the yard for, as it is currently illegal to do so. I'm just arguing the other side as I do see your point, but I believe your point is based solely on the assumption that the pennies will all trade in the future based on what you take them to the scrap yard for and I call foul on that one.........

Scotty[/quote]

Hey Scotty, no I wasn't just talking about scrap yard prices. Something just came over me today where I started thinking about newbies and "melt values" whether someone hopes to scrap in the future, sell their hoard in the future, or hold onto their hoard. I'm not suggesting melting either, as it is illegal. I am talking strictly about the ethics of our business/hobby, and should we consider doing a better job of educating new comers. If we educate, we are likely to keep folks in the hobby, which means more business, more fun, etc... Interesting discussion!

[HoardCopperByTheTon]

Next you will say we should inform folks about the true value of that paper stuff they call money. Then you would say the price of Silver Eagles shouldn't be so high since it is only an ounce of silver. Prices will be above or below melt depending on several factors.

I love when someone comes up to my table at a coin show, picks up a shiny 1 pound copper bar out of the stack.. and asks me "what is the melt value on this?"

I was negotiating a 2 ton deal with a scrapyard prior to the melt ban and they were going to buy it at the #2 copper price.

[adagirl]

Next you will say we should inform folks about the true value of that paper stuff they call money. Then you would say the price of Silver Eagles shouldn't be so high since it is only an ounce of silver. Prices will be above or below melt depending on several factors.

I love when someone comes up to my table at a coin show, picks up a shiny 1 pound copper bar out of the stack.. and asks me "what is the melt value on this?"

I was negotiating a 2 ton deal with a scrapyard prior to the melt ban and they were going to buy it at the #2 copper price.

Hoard, let's not get carried away here dude! However I do encourage telling folks the true value of the worthless fiat toilet paper. I try to educate as many people as I can....but most don't do anything about it, such as buying gold, silver, copper, etc.

Hoard you know that with Silver and gold the potential buyer can much more easily grasp that they are paying a premium over spot. Most folks that buy 95% pennies are still doing just fine because they end up paying well below "spot." I was just throwing out an idea/thought that came over me yesterday. No reason for anyone to get their panties in a wad. The thought hit me yesterday that 'what if' we did a better job of educating folks that were new and/or suddenly took an interest in hoarding pennies. It just seemed that we might retain more folks in the hobby/business.

[dpwozney]

copper+zinc=brass

so pennies are brass a very high quality brass but still brass.

excellent point. I have seen others refer to the 95% pennies as brass, and in some markets these little brass pieces being worth more than the coinflation value!

Canadian pennies are also a type of brass, and can be made into other types of brass by adding various metals.

Canadian pennies have some tin, in addition to zinc. 1978-1996 Canadian pennies are 98% copper, 1.75% tin, and 0.25% zinc. 1942-1977 Canadian pennies are 98% copper, 0.5% tin, and 1.5% zinc.

Brass types that have some tin, in addition to zinc, include admiralty brass, Aich’s alloy, naval brass, Nordic gold, white brass, and red brass (which includes ounce metal and gunmetal), according to this Wikipedia page.

[adagirl]

Wow, you did some homework here. Thanks for sharing.

[dpwozney]

Wow, you did some homework here. Thanks for sharing.

You’re welcome. In that previous post, I really got down to brass tacks.

[adagirl]

thanks again!