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Melting scrap


Goldhooked

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Is it even remotely cost effective to melt scrap in to bars?  I don't want to get in to melting it myself, rather explore the costs involved of paying for a service.  @BackyardBullion this is probably a good one for you to answer.

I'd like to start keeping an eye out for scrap .925 at below spot.  What sort of % under spot would it need to be purchased at, that once you add on the costs of paying someone to melt/pour/hallmark, its still a reasonable overall cost?

Or is it just as well to chuck all the scrap in a box and sell it to a dealer as and when you need to liquidate?  I assume a dealer is going to pay the same per ounce for bars as they would the scrap anyway?

Could hand poured bars attract a small premium selling privately, mitigating some of the cost of melting?

The thought of having your own bars building up gradually is far more appealing than a growing assortment of junk in a box, but only if the costs stack up!

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So basically I would charge for my time and running costs of the furnace. 

The time taken would depend on the quantity of silver and the form it comes in. If it is a giant box of cutlery I would have to take time to cut it all up before it fitted into my furnace for example. Obviously the more silver the cheaper it gets but as a rough estimate I would say 10oz of scrap cutlery would take about 3-4 hours of work (cutting, pouring & polishing) and I would think £15/hour for my time + £10 for the running of the furnace would be fair. £55 - £70. As with many thing labour is the most expensive part. Dont forget postage too and from as well!

As to whether it is better or not...you are talking about melting down (hopefully) already hallmarked silver into an ingot. This is then unhallmarked and is therefore harder to sell on. Dealers will have to test the purity before they pay, which costs money. 

The advantages though are:-

1) you have all your silver in one big bar. Easier to store and selling in one go at the other end.

2) it looks pretty and you enjoy it more than a set of forks

3) if you get someone like me who makes it into a bar maybe it will hold a premium in time - but I cannot guarantee that! ;)

925 is not a pretty as 999 silver but you can get some awesome results. 

I love the rugged bar I made for a customer. 

59ba3c754b980_RuggedBar.thumb.JPG.0bdb235f01122e5df7df1d74d31d6e61.JPG59ba3c77e465a_925KitKat.thumb.JPG.68696ad2148c3bdebe9df9728531cc13.JPGDSC_0001.thumb.JPG.50515a4706188cc51cf70d0c964a7a46.JPG

Visit my website for all my Hand Poured Silver: http://backyardbullion.com

And check out my YouTube channel 

https://www.youtube.com/backyardbullion

 

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8 minutes ago, Goldhooked said:

I like the middle one - it looks 'honest' but still expensive :D

What would the cost be for you to have them hallmarked as opposed to the costs a dealer would charge for testing them before they purchased it?

Hallmarking is going to be a different kettle of fish all together. 

It will depend on how many items you send in. Sending in less than 26 items in one go carries a £25 minimum charge. Also, it is done on the purity of the metal so even if I sent in a bunch of my 999 pieces too it would be separated. 

So one piece would be £25 + £10 postage (there and back). So probably +£35. 

Two pieces would be the same so it brings the cost per piece down considerably. 

Now the other issue is that the assay office would have to test these pieces. That would require a sample to be drilled and have the silver chemically tested. You would end up with a small hole in the side of your piece. This can be "plugged" of course but it is just an added pain in the ass. 

Drill.thumb.jpg.34501be81e90c97774531eb9a5e7e558.jpg

Also, the purity of the silver would be tested so you would have to make sure that the items you were melting were indeed 925. I would then probably add a little % of 999 silver to make sure we are well over the 925 threshold. If I get any articles that I submit fail the test I get a "blackmark" on my record which just means that more of my articles have to be tested in the future. 

So it is all possible but it is not cheap and it is not hassle free!

Visit my website for all my Hand Poured Silver: http://backyardbullion.com

And check out my YouTube channel 

https://www.youtube.com/backyardbullion

 

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2 hours ago, CarlosSilver said:

Cut it up before you send it to Back Yard Bullion and you instantly save yourself about £20.

 

Shhhhh you're doing me out of a job!!! ;)

By all means cut it up - in fact that is what another forum member did when they sent me their scrap.

 

Cut up scrap.jpg

Visit my website for all my Hand Poured Silver: http://backyardbullion.com

And check out my YouTube channel 

https://www.youtube.com/backyardbullion

 

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14 minutes ago, Goldhooked said:

@BackyardBullion have you melted 0.500 or is it not worth doing?

Never tried it - I would expect the results to be more like that rugged bar each time

Visit my website for all my Hand Poured Silver: http://backyardbullion.com

And check out my YouTube channel 

https://www.youtube.com/backyardbullion

 

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@Goldhooked I was considering the same thing a couple months ago, but I think after considering the costs it's not financially viable until you're ready to send, say, the maximum weight allowed by Special Delivery, Small Parcel, which I see is 2kg insured to £1000, for a very reasonable £12 (so £24 to have a return journey). And pre-cut the scrap. Even then I don't know if the labour cost on pouring 2kg of 'silver shot' would be a worthwhile return as a 'flipping' commission.

It might be better to try to work something out with the talented @BackyardBullion to the effect that he uses your scrap in a limited range of rustic 925 pours and gives you a fair return. I personally love those rough 925 bars and I'm not the only one, so it has potential as a series, maybe even a Sterling forum bar run.

On the other hand, as a bullion collector you might find that having your under-spot scrap turned into chunky bars and other molds, at a cost that brings them over spot, is personally rewarding and worth the relative spot price loss.

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@Jay2 I'm coming to the same conclusion in that its not financially viable.  Whatever cost is added on by the process is eating in to any potential future 'profits'.  And it would appear from watching ebay auctions over the last few days, that it might be easier to shift the scrap at a better price and/or faster than a bar!

I do have access to very decent courier rates if needed but I still don't think it would shave enough off the cost.

I'll just keep collecting the scrap for now and see where it goes.  I might just do one 10oz bar at some point just to see how the process goes and keep it as a souvenir of my precious metal journey :D

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  • 7 months later...
On ‎14‎/‎09‎/‎2017 at 09:28, BackyardBullion said:

So basically I would charge for my time and running costs of the furnace. 

The time taken would depend on the quantity of silver and the form it comes in. If it is a giant box of cutlery I would have to take time to cut it all up before it fitted into my furnace for example. Obviously the more silver the cheaper it gets but as a rough estimate I would say 10oz of scrap cutlery would take about 3-4 hours of work (cutting, pouring & polishing) and I would think £15/hour for my time + £10 for the running of the furnace would be fair. £55 - £70. As with many thing labour is the most expensive part. Dont forget postage too and from as well!

As to whether it is better or not...you are talking about melting down (hopefully) already hallmarked silver into an ingot. This is then unhallmarked and is therefore harder to sell on. Dealers will have to test the purity before they pay, which costs money. 

The advantages though are:-

1) you have all your silver in one big bar. Easier to store and selling in one go at the other end.

2) it looks pretty and you enjoy it more than a set of forks

3) if you get someone like me who makes it into a bar maybe it will hold a premium in time - but I cannot guarantee that! ;)

925 is not a pretty as 999 silver but you can get some awesome results. 

I love the rugged bar I made for a customer. 

59ba3c754b980_RuggedBar.thumb.JPG.0bdb235f01122e5df7df1d74d31d6e61.JPG59ba3c77e465a_925KitKat.thumb.JPG.68696ad2148c3bdebe9df9728531cc13.JPGDSC_0001.thumb.JPG.50515a4706188cc51cf70d0c964a7a46.JPG

Hi there @BackyardBullion,

How did you do that top bar? Was it a mold that gave you that finish? It looks cool! I hope I can do something as cool as that at some point!

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7 hours ago, BoredGit said:

Hi there @BackyardBullion,

How did you do that top bar? Was it a mold that gave you that finish? It looks cool! I hope I can do something as cool as that at some point!

The mould is the same as a regular 100g bar I make. The top of the bar got the patterns because the silver comes out and cools very quickly, something about it being an alloy means it cools.faster, I think it is the oxidisation process. Anyway, you get a very uneven surface because of this. I then worked on the bar with sandpaper to smooth it out as much as possible and created that awesome look.

Visit my website for all my Hand Poured Silver: http://backyardbullion.com

And check out my YouTube channel 

https://www.youtube.com/backyardbullion

 

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20 minutes ago, MrGeorge said:

@BackyardBullion What does it cost to buy the 999 silver shot say 1kg ? And do you lose some when melting and pouring? Might have a go myself if you can buy the shot at a decent price

Price often depends on quantities bought - but often it is around the same price as the cheapest silver coins you can purchase.

You don't lose anything from the melting process - other than small scrap pieces that come out of the crucibles with dirt on them - I have a box of scrap pieces covered in graphite which one day will end up in a giant furnace to make a big chunky bar.

Visit my website for all my Hand Poured Silver: http://backyardbullion.com

And check out my YouTube channel 

https://www.youtube.com/backyardbullion

 

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1 minute ago, MrGeorge said:

I dont really follow silver prices i know spot is around £12 and theres a high premium on everything in UK thats whats always put me off silver. What do the cheapest silver coins go for ? Would be interested in picking up a few kg of shot but only if i can get it for spot price or else very close to spot. Also what websites best to buy the stuff ? Had a look on google but only seen two websites 

Roughly about £14/oz for the cheapest silver coins from Europe. 

My supplier only deals in orders of 10kg or larger ;)

If you want close to spot metals silver will never be your metal - gold is the best bet. 

Visit my website for all my Hand Poured Silver: http://backyardbullion.com

And check out my YouTube channel 

https://www.youtube.com/backyardbullion

 

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3 minutes ago, BackyardBullion said:

 

If you want close to spot metals silver will never be your metal - gold is the best bet. 

But also remember that many coins tend to maintain a premium. Bullion Britannias typically go for £18-20 on eBay

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3 minutes ago, MrGeorge said:

 Whats the cost for 10kg ? It surly cant be that much above spot and who do i order it from or are suppliers kept hush hush ? 

Price is going to be around £450/kg I would imagine maybe more. Certainly more with shipping as the supplier I buy from (www.europeanmint.com) would charge £100 for shipping. 

Also, there is availability - it usually takes 3-4 weeks lead time for them to source the silver and have it made. 

The EU mint does not actively stock it and list it on their site because if they sell a certain amount in a year they would have to pay some huge taxes, so they might not even sell it to you as they have existing supply contracts in place (like with me!) and if they go over a quota they would lose money because of being forced to register for certain taxes on silver shot. 

Was a fascinating discussion with the manager of the EU mint when I went over in December last year to put things in place for 2018!

 

Visit my website for all my Hand Poured Silver: http://backyardbullion.com

And check out my YouTube channel 

https://www.youtube.com/backyardbullion

 

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1 minute ago, MrGeorge said:

Cheers for the info. Ive emailed a few dealers hopefully i can source a nice deal but to be honest i dont think i would pay more than £400 a kg dont mind buying a bigger order as it would be a one off or at least a rare order for me.

Good luck mate - dont forget to factor in the costs of melting it - you would need to buy a furnace for that volume, and they can cost £500+ for a decent sized one. 

Then the running costs, graphite crucibles - £25 each for large ones - buying moulds, safety equipment etc!

If you are after an end result that is cheaper than buying a KG block of silver from the open market this is not the hobby for you!

Visit my website for all my Hand Poured Silver: http://backyardbullion.com

And check out my YouTube channel 

https://www.youtube.com/backyardbullion

 

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