Metal costs push coins beyond ‘melting point’

A global price hike in metals is raising concerns that the production cost of coins will rise beyond their monetary value, a phenomenon known as passing the “melting point.”
The composition of Korea’s 50-won coin (five cents) is currently 12 percent nickel, 70 percent copper and 18 percent zinc. But the price of nickel surged to $52,150 per ton on the London Metal Exchange, a dramatic increase from $34,025 in late 2006 and $13,372 in late 2005. The price of copper also spiked to a near record $7,392 per ton.
As a result, the total cost of producing one 50-won coin has become 52.58 won, exceeding the coin’s monetary value.
Pressured by rising metal prices over the past several years, the Bank of Korea reduced the size of 10-won coins late last year and substituted the relatively cheaper aluminum for copper and zinc. With the production cost of 50-won coins and 100-won coins increasing, the bank may soon change their materials or size as well.

By Hong Byeong-gee JoongAng Ilbo [hawon@joongang.co.kr]