When nickels are melted down, they’re now worth more than their face value.

In the midst of the Ukraine conflict and financial turmoil, nickels are now worth more in melted metal than they are in face value. However, before you empty your piggy bank and light up your backyard smelter, there are a few things you should know.

According to McKinsey & Company, before the conflict, Russia was the world’s largest supplier of raw nickel, accounting for 21.1 percent of the worldwide supply. Canada came in second, accounting for 17.1 percent of global raw nickel mining. According to the London Metal Exchange, the conflict in Ukraine has injected uncertainty into the global market, leading the price of gold to rise by as much as 250 percent in a single day in March.

Some Americans have explored the benefits of stockpiling nickels as a possible investment and inflation hedge on Reddit. Nickel is required in vehicle batteries, among other things, and has a market worth outside of coin manufacture.

If you melted down a single nickel today, it would be worth $0.079, or roughly 60 percent more than the face value. A $2.00 roll of nickels containing 40 coins would be worth $3.18 at those prices.

There are a few more issues with nickel hoarding thought, one of which being the legality of melting coins. Melting nickels, dimes, quarters, and pennies for the purpose of simple destruction, art, or other non-economic goals is still lawful in the United States, but melting nickels to sell the metal itself is prohibited.

It’s also worth noting that, according to the United States Mint, today’s nickels contain only 25 percent of the metal for which they’re named. Copper is used for the rest of the coin. (Ironically, pennies are primarily made of zinc rather than copper.) Since 1982, the copper-plated coin has only included 2.5 percent of the precious metal.)

Even if you stuff nickels beneath your mattress to protect against inflation, only a little portion of the coin’s value will increase as the price of raw nickel rises.

In reality, producing a 5 cent nickel has been costly for quite some time. The unit cost of the nickel increased by 14.8 percent in Fiscal Year 2021, according to the United States Mint. Nickels were more expensive to produce than they were worth in cash for the 16th year in a succession.

Image Credit: Getty

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