US president Donald Trump ordered the US Treasury Department to stop making the zinc-heavy penny, lamenting the coin's production costs, but any such effort may require more than just an executive directive.
Trump on Sunday targeted the "wasteful" penny in a social media post, saying the US "for far too long" has minted the coin, "which literally cost us more than 2¢." The US Mint in its latest fiscal year lost $85mn producing pennies, with unit costs increasing by 20pc to 3.69¢ from 2023.
Metal market participants do not expect a halt in penny production to materially reduce demand for zinc, which accounts for 97.5pc of the 1¢ piece's composition. Copper comprises the balance.
"It doesn't take a whole lot of metal to make pennies," one source told Argus.
The Mint shipped 3.2bn pennies last year, consuming 7,732 metric tonnes (t) in zinc from October-September. In contrast, the US imported 584,144t of unwrought zinc during the same timeframe.
Tennessee-based Artazn, which provides the zinc blanks used in the Mint's penny production, did not respond to a request for comment.
Conversely, the Mint lost nearly $18mn making nickels, which would become the lowest-denominated coin if Trump has his way. Unit costs for the 5¢ piece were higher than the penny's, increasing by 19pc to 13.78¢.
Still, it remains unclear whether the president — through the Treasury — has the authority to unilaterally end circulation of the penny. The US Constitution gives Congress the exclusive power to "coin money" and determine values, but Treasury secretary Scott Bessent may be able to halt new minting until legislative action is taken.
The Treasury and the Mint did not respond to requests for comment.
Trump's efforts echo past attempts by his predecessors and other politicians to do away with the penny, but to no avail. Former president Barack Obama questioned the coin's function in 2013, and former Sen. John McCain and current Rep. Claudia Tenney (R-NY) filed bills in 2017 to suspend output for 10 years.
