Why Coins Are Recycled And What It Means To Metal Suppliers

That nickel in your pocket? Guess what? It is not 100% nickel. Nope. It is comprised of some nickel, plus three or four other metals to produce a sort of nickel alloy. Once upon a time, it was pure nickel, but it became too difficult to find enough nickel to keep minting new nickels. 

So, the first step the U.S. Treasury Department took was to create a nickel alloy so that nickels could still be partially nickel. In the last one hundred years, the Treasury decided to start recycling outdated coins to regain the metal needed to mint new coins. Here is more on why recycling old coins occurs, and what this means to metal suppliers.

Why Recycle the Coins?

There are actually several good reasons for recycling old coins. One, the Treasury is able to get all of the metal it needs to mint new coins. There is a shortage of certain metals in the world, and recycling the metals one has on hand or has gathered reduces the demand for more metals to be harvested from the ground. Two, the government attempts to avoid counterfeit by minting new money regularly and often.

It may even change the faces of coins every five to ten years so that counterfeiters creating old coin faces will get caught. Three, some metals tarnish and rust faster, giving the alloys a coat of grime that makes it difficult to identify the coins' faces and values. By recycling the coins, the melted down metal becomes more apparent, and it can be cleaned and purified to create new shiny coins that are easily identified and identifiable.

What This Means for Metal Suppliers

While coins may only use a small percentage of the metal your company pulls from mines, you still rely on a continuous demand for the metals your company provides. Recycling coins reduces the demand, which may cause a build-up of metal reserves. It may also cause metal prices to drop in value. You could compete with this by starting a recycling program for your company. Then the metals you recycle can also be sold for a profit.

You could also pull fewer metals from the earth. Less availability of certain metals to sell to the U.S. Treasury drives up the value of these metals. These metals include nickel, cadmium, zinc, iron, and copper. Higher demand for these metals with a lower supply creates a price increase. Just make sure that the metals your company recycles and the ones it has on hand are always a little less than the need/demand.

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