Guide To Sell Scrap Silver To Make Money

3 Hot Reasons To Be Bullish On Scrap Silver To Make Money!

Many people don’t know that they can sell scrap silver to make money with old jewelry, silverware and coins.

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Scrap metal, particularly “precious” metal, can be recycled for cash payments at local scrap dealers of precious metals, keeping this useful and valuable material out of landfills.

Unfortunately, silver often end up in the garbage due to the lack of knowledge and sources for metal recycling.

I am here to help educate the community about the opportunity to bring your unused silver items to the right place for recycling, and make some cash, too.

How To Recycle Scrap Silver To Make Money?

Scrap silver metal brokers deal with homeowners and other individuals on a daily basis both local and online.

For example, precious metal brokers are eager to buy your Sterling and 925 silver that’s old or broken that you need to dispose of.

While these scrap dealers see a large quantity of silver metal from various sources, they welcome yours, too, so consider selling it.

By taking or mailing your precious metal scrap, you can make money and recycle the materials at the right place.

How To Assess Your Silver Metal Value?

Determining if you have a ferrous or non-ferrous metal and separating the two types is the first important step before bringing metal to be recycled.

The easiest and most common way to figure out what kind of metal you have is by grabbing a magnet.

But, if you’re like me, I want all the “right” tools for my business so grab my favorite magnets.

If the magnet sticks to your metal: You have a ferrous metal in your hands, which simply means something with a composite of steel or iron.

For all intents and purposes of using scrap silver to make money, ferrous metal is not worth it because the silver is no doubt plated.

Therefore, scrap silver dealers won’t accept it.

Rural Money Note: Many common metals such as copper, aluminum, brass, stainless steel, and bronze are categorized as non-ferrous metals.

These metals are very valuable to recycle and are worth more money at the scrap yard.

Once you have at least a pound or more of Sterling and/or 925, search for a local or online silver dealer and call to see what they are paying for silver.

Make sure you ask about their procedures and requirements so you know before you go or mail your precious items.

Oftentimes, homeowners feel intimidated going to a scrap precious metal dealers.

By calling ahead for information and making sure you have your metals separated to the best of your ability, you can proceed with confidence.

Three Reasons I Am Bullish On Scrap Silver To Make Money

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Jewelry

The recycling of silver from old jewelry makes up the second smallest category
of silver scrap supply.

Its limited scale is also marked in comparison to gold; silver jewelry fabrication may be more than double gold by weight, but its jewelry scrap is less than half of gold.

These modest numbers for silver are largely due to the small amounts typically sold back by consumers as the low value per item means there is little incentive to sell, until there is a downturn in the economy!

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Silverware

Silverware recycling represents the second largest area of global scrap.

Falling silverware scrap has been far from a constant story as the ramp-up in silver prices in 2011 led to a dramatic surge in silverware being sold back.

This was concentrated in Europe and North America, which together saw the recycling of old silverware products jump by almost 75% in 2011.

What may appear surprising is that the jump in silverware (known as flatware in North America) scrap far exceeded that of jewelry, even though the latter boasts a far larger above-ground (in the open) stock.

There are three main reasons for this apparent disparity.

First, the weight of individual silverware items is far higher than for jewelry and so western consumers have little incentive to liquidate their holdings of jewelry, given the low value they will be able to realize.

This is reinforced by the fact that western jewelry typically attracts an even higher retail markup compared with silverware.

Secondly, silverware has largely fallen out of fashion in many western markets and so consumers were often quite prepared to take advantage of high silver prices during 2011 to sell back, for example, an unwanted piece of inheritance.

Thirdly, even if silverware consumption today is modest, that was not the case historically, and this means a large pool of these products.

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Coins

Not all melt of silver coins is classified as recycling, as some is best categorized as disinvestment (selling or liquidating an asset).

However, if the silver metal came from an unsold coin, it never enjoyed investment and so cannot be disinvested.

In addition, circulating coins are not true investments and so the melt of these coins is best treated as scrap.

These volumes, however, are not large; and as a result, represents by far the smallest category of global silver recycling.

Moreover, that volume is considerably lower than recycling levels seen as recently as 2010-13.

We may see a slight rise in volumes this year, but beyond that coin scrap is expected to trend gently downwards.

A key reason for this is the behavior of the European market, which accounts for around 70% of the global total.

Much of this in turn comes from Germany, which has a long history of producing commemorative coins for the local market and so the volume of unsold coins (or even coin blanks) can be sizable.

There was some link between the trend in silver prices and silver coin recycling as the incentive to clear out slow selling stocks grew in line with the earlier rise in prices, and there was a need to melt those coins where the value of the silver content exceeded the face value.

With these near-market stocks greatly reduced, coin scrap understandably fell back in 2013 and 2014.

Establishing the level of true coin scrap in North America is difficult because of the blurred line between scrap and what is best viewed as disinvestment.

I would, for example, certainly exclude from scrap the (limited) melt of modern era bullion coins, such as the US Eagle or Canadian Maple Leaf.

However, it is understood that sizable volumes of old circulating coins are still being melted down.

Even though massive volumes of these coins were struck, relatively few examples now find their way into the market, simply because of the quantities that had already been sold back during the 1980s and 1990s.

In terms of the pieces that are liquidated, the 40% coins are also popular with brazing alloy manufacturers, given the coins’ significant copper content.

What Are The Prices Of Silver Scrap?

The impact of the silver price on collecting, selling and recycling varies across different sources.
As I mentioned, silverware scrap is the most price sensitive.

This relates to the fact that silver accounts for a relatively high portion of the final product’s price and the high unit value.

As a result of these factors, during the last bull market, there was a dramatic increase in returns of old silverware to the market from consumers and the trade.

While the price of the metal also accounts for a sizable part of finished jewelry, the far lower unit value means that the incentive for individuals to sell back old pieces is limited.

Indeed, the bulk of jewelry scrap tends to come from the supply chain, namely manufacturers, wholesalers and retailers, liquidating old or unsold inventory.

Jewelry scrap is also restricted by the fact that silver jewelry is still considered fashionable, unlike many silverware items.

Unsold commemorative coins and old circulating coins are another change in supply and price source.

The impact of prices on industrial scrap in total is less pronounced.

Having said this, changing silver prices do heavily affect the economics of recovery from certain low yield niches within waste material such as cellphones, etc.

The viability of recycling electronic waste is typically a function of the value of its contained gold, which by and large in most products has remained high enough over the last decade, or so to be profitable, as lower prices in the 2000s were countered by much higher yields.

Lastly, changes in the price can be important as they alter the enthusiasm with which collectors like me will seek price sensitive scrap silver.

What Is The Stockpile Of Silver Scrap?

After periods of heavy scrappage, the above-ground inventory of near–market product can be depleted, resulting in constrained supplies, even if prices are favorable.

Silverware is a very good example, illustrating the importance of stockpiles for scrap.

Although annual fabrication demand has been relatively low in recent years, scrap supply from old silverware rocketed during the bull market of 2008-2011.

This was only possible due to the legacy of decades of consumption having resulted in a sizable stockpile of silverware held by consumers, which was “teased out” by the high silver price.

In contrast, looking ahead, it is recent years’ decline in this near-market stockpile that I believe will cap supplies, in spite of any possible price increases.

What Is The The Ownership Concentration Of Scrap Silver?

The degree to which holdings are concentrated can also have a bearing on silver scrap as it can impact on the profitability or desirability of collecting, selling and recycling.

I know this factor is of little importance for major recyclers, but I am willing to buy just one piece of silverware and a coin to add to my collection.

Are you with me on becoming bullish to buy scrap silver to make money?

Wrapping Up

This article brings together why collectors should be bullish on collecting and selling scrap silver specifically on the drivers that influence the volume of scrap, i.e. jewelry, silverware and coins.

Price is undoubtedly a key factor, something that was clear during the bull market of 2008-2011.

Above-ground inventories of fabricated products are also important, while the extent to which ownership is fragmented can play a significant role.

Finally, legislation encouraging or even forcing consumers as well as the supply chain to recycle end-of-life products, rather than dispose of them in landfill, are also boosting silver recoveries, making opportunities for me and you!

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