# where does the refiner make money



## Anonymous (Apr 9, 2008)

hi all

I am very curious, i am trying to set up a gold buying program and i can collect scrap. But i want to know there is a margin where the refiner makes money. 

Just show some light on this topic...lets discuss


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## Rag and Bone (Apr 9, 2008)

It's well known that refiners steal. Some more, some less. I don't know about jewelry but it's really bad with e-scrap. The PM content of a load can vary considerably. Supposedly there are honest ones but they seem to be as rare as unicorns. They capitalize on ignorance. 

If you're thinking about buying scrap, you need to have a solid agreement with the refiner so you know where to set your prices.


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## calgoldrecyclers (Apr 10, 2008)

consider this,
a refiner is in the business of making money. buy low and sell high, or as high as one can get. some refiners, unfortunately, will deal in an underhanded way. its like the curse of the gold mummy all over again. 
some people will never be satisfied doing business on a fair and honest level. if you are looking to sell to a refiner, visit the scrap yards and ask the guys who are selling scrap to them what they think of em. if you get alot of negative feedback, you will know to take your scrap elsewhere.
if on the other hand, you are looking to start your own recovery and refining business, you will be pricing on a daily basis, mostly to compete with the business around you. 
i used to haul trailer loads of scrap aluminum, and while i was waiting to be loaded, i would strike up conversations with the recyclers selling to the scrap yards, and let me tell you, just about everyone i was talking to, was getting shafted on the buy pricing. when aluminum was trading for 1.50, the scrap yards were buying for 45 cents. thats alot of profit for the scrap yards. dont expect to get much from a scrap yard. 
no matter what type of scrap you are selling.


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## Anonymous (Jun 1, 2008)

It is impossible for a gold refiner to pay 97 - 98% of the market. Unfortunately, instead of being honest and up front with the customer, refiners advertise those payout schedules and then charge ridiculously low refining fees and take their real profit under the table out of the finished product. If a refiner were to charge the real refining charge to the customer, he would be out of business because no one does.
It is unforutnate, but reality and I hate it.


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## Lou (Jun 1, 2008)

I've probably sent in 10-12 troy ounces of fine gold to Aragold, a refinery based in Dallas, TX that advertises a 98% payout on gold. Each time, the expected payout was just that, as expected. I have some _very _nice balances (in fact, nicer that what the refinery uses!) and I knew exactly how much gold I sent in.


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## Rag and Bone (Jun 1, 2008)

Balances? Cool!


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## Harold_V (Jun 2, 2008)

surreal77 said:


> It is impossible for a gold refiner to pay 97 - 98% of the market.


Sorry-----I don't agree. 

They can damned well pay as much as 98%----they sell over spot, and retain traces of other elements as part of their profit. That includes the platinum group of metals. May not sound like much with one small shipment, but consider the volume they process, it's a substantial amount of value. 

Mind you, I'm not defending major refiners-------I've been taken to the cleaners by more than one of them. 

Harold


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## JustinNH (Jun 2, 2008)

Yeah, and that is just for gold... PGMs and Silver are usually a lot less that the 98% they pay for gold, so they can make profit that way as well.


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## Eric (Jun 2, 2008)

Seems like to me more money is made by selling old electronic junk on eBay. I have been to this one flea market and I noticed buckets upon buckets of remote controls made in the 1990's selling for $3 and there is probably only 25 cents worth of gold in them at the very most.


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## Rag and Bone (Jun 2, 2008)

Eric said:


> Seems like to me more money is made by selling old electronic junk on eBay. I have been to this one flea market and I noticed buckets upon buckets of remote controls made in the 1990's selling for $3 and there is probably only 25 cents worth of gold in them at the very most.



The ebay prices are certainly inflated. Deals are still out there for PM scrap. I've been on both sides of that coin. 

Why were people buying remotes? For scrap or use? I've got a gaylord of them. 8)


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## calgoldrecyclers (Jun 7, 2008)

maybe those remote controls are for the fellers that lose them. i wouldnt put more than five cents worth of gold on them there remotes. they are worthless. they should give em away for free. i see them at my local thrift store for a buck a piece. are they crazy or something? sheesh! people sometimes. they need to get rid of their pricer. why would the price at thrift stores go up?


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## SilverNitrate (Jun 10, 2008)

Remotes for TV certainly in the US will for the most part meet the garbage can as the DTV converter will be needed to change channels on NTSC sets. Tho you may want your old remote to turn on/off the power or video, but hey the DTV converter remote can do also.
I would be suprised if a remote control contained any gold.


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## GeeDub (Feb 21, 2009)

Harold_V said:


> They can damned well pay as much as 98%----they sell over spot, and retain traces of other elements as part of their profit.


I agree.
Usually an honest refiner makes a profit in these ways:
1) The spread between his buy and sell.
2) Refining charges.
3) Surcharge over Spot to end users he sells to.
4) Gambling. He will hedge most purchases, but play the market and hold for a higher price to sell.
5) Metals he doesn't pay you for or pays a low percentage for. It's not his job to teach you metallurgy. You must know your material. If you sell on assay, and don't say "I know it has significant (fill in PGM here), assay for it," he won't. So he can't pay you for it. And if he says "I'll assay for (list lots of PGMs here)" he would be ripping you off in assay charges if the yield is low, so he won't say that.
6) Assay charges. The cupellation is a batch process, but you will be charged labor as if all the time was spent on your sample. This is fair, because when business is slow, yours _may be_ the only assay.
7) Metal contained in slag from the melt. He won't give you the slag unless you ask. The vast majority of customers would not know what to do with it anyway. I have seen it offered by refiners, to be met with a puzzled look from the customer. Is _this _honest? Again, not his job to teach.
It _is_ dishonest if he uses a thick, viscous flux and stirs rapidly and roughly right before the pour.

These are the ones I can think of off the top of my head. We smaller refiners don't make the Spot surcharge. That goes to the refiner we sell it to. When we sell to end users like casters, we have to work hard at selling to get more than spot.


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## goldsilverpro (Feb 22, 2009)

GeeDub,

Have you ever been on the refiner side of the counter? If not, your speculation as to how a refiner makes money is naive. And, in my experience, the term "honest refiner" is an oxymoron.

Only the stupid refiner speculates. There's no need to. He locks the buy and sell in. The smart refiner doesn't worry about the market going up. He only protects himself against the market going down.

Much of these charges are eyewash. He basically takes what he wants. He bases your return on how stupid he thinks you are - basically, on how well you prepared to sell this lot to him. He can tell by looking. He tries to take as much as he can from you and still get you back as a return customer. The charges are formalities. The old saying is, "You can shear a sheep many times. You can only skin him once."

If the lot size is huge, and if he is greedy, he may care less whether you return or not. He may take 90%. What recourse do you have?

The trick is to cover your butt by proper preparation and by what you demand from the refiner. If you allow him total control, you will surely get screwed. Every thing you send him has a gray area. One of your jobs is to reduce the gray area before sending the scrap to him. You have to have the knowledge to know how to take charge. You have to know your material.


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## GeeDub (Feb 22, 2009)

goldsilverpro said:


> GeeDub,
> Have you ever been on the refiner side of the counter? If not, your speculation as to how a refiner makes money is naive. And, in my experience, the term "honest refiner" is an oxymoron


Have I ever been on the refiner side?????
I ran a very profitable refinery for 15 years. In the most competitive market in the world; the New York Metropolitan area. 
Your answer is a crock full. You just don't like refiners! 
There is no "naive speculation"here. That list is how I operated, and I never had to cheat anyone. There is plenty of money in this industry if you know what you are doing. 
"The charges are formalities"?
Nobody works for free. The charges were designed to compensate me for my labor, and I put them up front for the customer to see. If he didn't want to pay, I just didn't take his business.
You won't find a person on this planet who will say I cheated them (and no, it's not because they are all dead.)
"Only the stupid refiner speculates."?
All that shows is that _you don't have the skills to do it_. I was also a successful day trader in gold and silver. You can't hedge every once unless you buy exactly the same amount as is in a contract. There will always be an odd number of ounces. Capable people treat them accordingly.
"The smart refiner doesn't worry about the market going up"? 
Of course no one worries about making more money.
-Gee


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## Harold_V (Feb 23, 2009)

GeeDub said:


> Your answer is a crock full. You just don't like refiners!


Yes, that's it, Chris. You don't like refiners. You just overlook the fact that you've been one for more than 40 years. What should you know?

Shades of Sue?

Harold


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## SapunovDmitry (Feb 23, 2009)

I don't know about US and Europe, but in Russia they always sing a siren song about that there is nothing there, and if you are not a better than they are in estimating question you are doomed not to get much....

For example, if one is to send a 15 tn truck loaded with PC boards and other PM containing scrap they will check the gold and silver conent by following way: they will take one sample (about 1% of weight, 150 kg) from your shipment and analyze it.The result strongly depends on what they take for sample(They always choose the worst material if you dont fly to Siberia and Ural each time just to point them what they can take). Thats aint fair from my point of view, but if one says this to them, they ask "What are you going to do with this stuff if you are not going to send it to us? You have no right and no resources to refine it yourself. If you are so smart concentrate it yourself till it is dore bar and THEN :lol: send it to us, dude. Pay for the refining, shipment to Siberia, for guard and so on yourself.
It is called monopoly  

Everything depends on the material.
If it is confirmed 999 gold bar and they only have to stamp it they won't take much.
They don't like such a material though.


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