Refiners Seek to Keep Helping Laboratories Profit
Declining use of precious metals challenges the industry
By Jason Mazda
Fluctuating precious metal prices and the proliferation of monolithic metal-free dental restorations have challenged the dental refining industry. The abundance of gold and palladium that flowed into refineries in the 20th century has slowed to a relative trickle.
PFM restorations do still occupy a significant portion of the dental market, however, and sending scrap metal to the right refiner can make a difference in a laboratory’s bottom line at a time when every dollar can make a difference in keeping your business afloat.
“My personal belief is that the PFM market is not going to reach zero,” says Bob Raths, President of Cora Refining. “There will be precious metals in the dental industry. There will be a shakeout among refining companies. Those who cannot reduce their costs will fade away. Cost controls are the only way a refiner can get you an adequate return.”
Tony Circelli, Refining Manager at Heraeus Kulzer North America, notes that while dental restorations have shifted between high gold and high palladium several times since 1980, high-noble metal (60% precious metal with at least 40% gold) has dwindled in laboratories. This is partially due to the emergence of CAD/CAM milling technology and new non-metal materials, but it is also due to the price of gold, which went above $1,800 in 2011 but has dropped steadily over the past 2 years to below $1,200, according to Nasdaq.com.
“More of what comes to refiners from laboratories now is non-precious metal, such as nickel, chrome, and cobalt,” Circelli says. “For the refiners of the world, the material coming from the laboratories is harder to melt, harder to get a representative sample for the assay laboratory, and if you are dealing with a company that is not experienced and well equipped to do that kind of melting for these higher melting range alloys, you might not get a good representative sample.”
Indeed, Raths says Cora is committed to perfecting its sampling of those nonprecious metals.
“We are exploring new techniques of sampling,” Raths says. “That is where we spend most of our time now: making sure we can get the material into a homogenous sample.”
With the market in this state, Raths says one way refiners can turn more of a profit—and thus pass along more profits to their clients—is with an effective trading desk.
“We have Cora Trading, which is what I call dynamic hedging,” Raths says. “We use options, derivatives, and futures, and while the metal is in our possession, we aim to make an additional 5-10% profit just using the markets.”
Circelli says costs can be controlled when the refiner keeps the entire process in-house. Outsourcing parts of the refining workflow incurs extra fees, he says.
“I always tell laboratories, ‘Do your research, and you will find the right refiner that will meet your needs,’” Circelli says.