TAMPA, Fla. (WFLA) — Amid war in Ukraine and market chaos, nickels are now worth more in molten metal than their face value. But before you empty the piggy bank and fire up a backyard foundry, there are a few things you need to know.
According to McKinsey & Company, Russia was the world’s largest exporter of raw nickel before the war, with 21.1% of the world’s nickel supply mined in the country. Next comes Canada, with 17.1% of the world’s crude nickel extraction. The war in Ukraine injected instability into the global market, sending the metal’s value soaring by as much as 250% in a single day in March, according to the London Metal Exchange.
On Reddit, some Americans have discussed the value of hoarding nickels as a potential investment and hedge against inflation. Nickel has value outside of coin production, it is used in car batteries, among other products.
If you were to smelt a single nickel today, the metal would be worth around $0.079, or nearly 60% more than the face value of the coin. At these values, a $2.00 roll of nickels, containing 40 coins, would be worth $3.18.
There are also a few issues with the thinking behind nickel hoarding, one of which concerns the legality of melting the coins. Melting nickels, pennies, quarters, and pennies for simple destruction, artistic creation, or other non-economic purposes is still legal in the United States, but it is illegal to melt nickels for sale the metal itself.
It’s also worth noting that today’s nickels are made with only 25% of the metal that gave them their name, according to the US Mint. The rest of the piece is copper. (Ironically, pennies are mostly zinc instead of copper. The copper-plated coin has only contained 2.5% of the precious metal since 1982.)
So even if you stuff nickels under the mattress to hedge against inflation, only a small portion of the coin’s value would increase with the cost of the raw nickel.
In reality, 5 cent nickel has been expensive to produce for quite some time. The US Mint reported that the unit cost of nickel rose 14.8% in fiscal year 2021. For the 16th consecutive year, nickels were more expensive to produce than they were worth in cash.
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