Friday, March 21, 2014

Rising Chinese Small Brass Medals

Modern Chinese precious metal coins and medals have undergone significant market corrections in the past three years. The price of many types fell by as much as 60% or more. Even the recognized rarities such as the Year of the Child matte silver coin were not immune to this drop. They have been held hostage to the fluctuation of gold and silver bullion prices.

In the meantime, the previously little noticed small brass medals experienced a big boom both in popularity and in pricing. Small brass medals available for 10 dollars two years ago now sell for several dozen dollars or more. Moreover, some have totally disappeared from the market, available only for trading among collectors, such as the goldfish set and the pagoda set from the original strike.

Small Brass Medals from China
Small brass medals were introduced to the Chinese market at the same time as precious metal coins/medals, in 1979. Three sets were produced that year by Shanghai Mint: Shanghai Scenery, Jianzhen and Auspicious Palace Lantern, all of which are extremely rare now and have witnessed rapid price spikes. A recent Jianzhen set sold for $5,400. The small brass medals most sought after were minted before 1985.

Up to this day, the Chinese state mints in Shanghai, Shenyang, Shenzhen, Nanjing, Xi’an and Chengdu are still producing massive amounts of brass medals every year, to supply them to the market at extremely low prices, at $1 or $2 a piece. These low cost types have been used as gifts or souvenirs among the low budget population, such as students. But they pave the way to more serious collection when more budget is available to the collector.

Motivation for Small Brass Medal Collection
Many small brass medals were twins to precious metal coins/medals. They were designed by the same artists who designed precious metal coins/medals, and minted by the same official mints. For example Shenyang Mint minted the first round of brass lunar series using many of the reverse designs of the gold/silver lunar coins. Shanghai Mint produced brass pagodas and goldfish even before the silver sets were minted. These small brass medals provide collectors with a smaller budget the opportunity to enjoy the same great design and artwork as available on previous metal coins/medals.

Small brass medals are interesting also because they were often the test ground for new designs and new technology, to be used on precious metal coins/medals. The multi-sided shape, for example, first occurred on a brass medal. In early brass medals from Shanghai Mint, we see matte proof, brilliant proof and frosty proof types. The dragon and phoenix design on the silver God of War and Wealth was used on a small brass medal long before the silver medal. It is likely that some of the small brass medals were actually test strikes.

Originals and Restrikes
Serious small brass medal collectors often aim at those released before 1985 because of their scarcity and superb workmanship, before the production of brass medals was moved to a satellite site by Shanghai Mint in 1986.  However, because of the popularity of those early medals, many were restruck by the mints, including the pagodas, goldfish, auspicious palace lanterns and the lunar series. In the early 1990’s, Shanghai Mint even produced gold and silver plated versions of many such brass medals. The plated versions are easy to tell, but some collectors have been worried about the solid brass restrikes as their mintage was considerably larger than the originals and they looked quite alike.
Such solid brass restrikes have disturbed market prices. A good example is the first round of lunar medals (from 1981 to 1992) by Shenyang Mint. The set sold well as they had the same designs as on the precious metal coins. In an attempt to maximize profit, Shenyang Mint has been continuously restriking the set, bringing the price down to about 10% of their Shanghai Mint counterpart, which was not restruck.

Not enough research has been done to distinguish the originals from the restrikes if they are solid brass. For the most well-known sets, however, the distinction is understood. The original auspicious palace lantern brass medals had “1980” on it, which was removed from the restrikes. The goldfish and pagoda restrikes each have its own telltale signs well known to silver medal collectors. The brass medal expert RAREMEDAL claims that restrikes used different material than the originals, which is easy to tell by an experienced collector. Such experience needs to be shared among small brass medal collectors.

Original Strikes of Shenyang Mint 1st Round Lunars


Brass and Gold/Silver-Plated Brass
Many of the solid brass medals have gold/silver-plated versions. The preference is for the solid brass medals, because they are the often the originals, and also because the initial plated versions were done by plating to medals already struck in brass. The process produced medals shiny all over, with some details lost in the gold or silver coating. Medals produced with this technology are huge in number, as witness by the many gilt and silver plated pagodas and goldfish on the market. Among Chinese collectors, they are treated as "mint state/business strikes."

Later on, however, Shanghai Mint improved their technology, adopting a "plating before striking" process. Medals minted with this technology retain all the details of the dies, while displaying typical proof features such as mirrored fields and frosty devices. They have the further advantage of the protection provided by gold or silver against elements. Unfortunately, due to the association with plating, these medals are still shunned by Chinese collectors, leading to current low prices. When brass medal collectors learn to appreciate the advantage of this technology, these medals minted with "plating before striking" will catch up in price.

"Plating before striking"
Four Beauties

Hong Kong Scenery

Opportunities for Collectors outside China
Collectors outside China interested in taking a ride with Chinese small brass medals find themselves in a similar situation to those collecting Chinese previous metal and circulating coins: many such early brass medals were sold in Chinese gift stores for foreign visitors or were simply given away as free gifts to mint visitors from overseas or frequent buyers of gold/silver coins outside China. A set of Shanghai Scenery brass medals recently sold on eBay had been given as gift to the previous owner when he bought panda coins in California. It is likely that some of these brass medals are still collecting dust in someone’s closet in the US or in Europe. Their owners normally do not think much of them as they were made of brass. The owner of the Shanghai Scenery set was pleasantly surprised when it was sold for more than $2,000.

Apart from the “inventory” outside China, some Chinese dealers are starting to list small brass medals on eBay. The pricing needs to be watched out for, as some dealers are taking advantage of the opaque pricing and charging outrageous prices. Shopping/asking around before purchase is strongly suggested.

Market Trends and Risks
Serious collection of Chinese small brass medals has a very short history. Some people short of cash started collecting them long ago, but it did not take off until 2011. It has been booming ever since, without significant corrections, especially for the early 1980 types. The major reason is that more collectors, myself included, are joining in the hobby. The QQ discussion group which boasts most of the senior brass medal collectors grew 50% in size after I joined it half a year ago. More collectors seeking top rarities add to the price pressure. It is not uncommon for a collector to resort to the overpaying strategy to secure what is available on the market.

As with other premature markets, the small brass medal market is characterized with little data, including those on mintage and pricing. There are no dedicated catalogs for small brass medals, although one is in the works. Their mintage is mostly estimated based on their market availability, which can be extremely misleading. There are few records of market transactions of the top rarities, either at auctions or in ebusiness, as many are privately traded among the senior collectors. Grading is not popular as some senior collectors still prefer OMP, and as brass often does not grade as well as precious metals. Personal relations with dealers and other collectors are a lot more important in this hobby than in gold/silver coin collection. There is a strong similarity between the current Chinese small brass medal market and the Chinese circulating coin market five years ago, when collectors faced the same issues.

As with precious metal medals, the mint is essential to the value of the small brass medal. Those from Shanghai Mint and Shenyang Mint are most popular, although Nanjing Mint, Shenzhen Mint, Xi’an Mint and Chengdu Mint have been very active in releasing low price brass medals, too. Those from private mints are generally shunned by Chinese collectors.

One last risk to mention is the environmental damage. Unlike silver or gold, brass is very active chemically. The current conservation methods do not work well on brass either. This led to the loss of many small brass medals, and it needs to be seriously considered before anyone starting brass medal collection. It was the major reason I stayed away from brass coins/medals until not long ago, missing a lot of good opportunities. It turned out that if well cared for, brass medals can retain their luster and color for a long time.  But once damaged, restoration is unlike to work any wonders as it sometimes does with silver coins. Pick the best specimen, keep them in a dry and smoke free environment, and they will be as lovely in many years as when they were first purchased.


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