Author Topic: Grading standard of NGC and PCGS  (Read 16626 times)

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Offline poconopenn

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Grading standard of NGC and PCGS
« on: August 18, 2014, 09:02:28 PM »
Attached are summary tables of population reports of NGC vs. PCGS as 8/15/2014 for the following series. The data cover all varieties,

   BU gold panda ½ oz., 1982-1993
 
   BU gold panda 1/10 oz., 1982-1993

   BU silver panda 1 oz., 1989-2000

   Proof silver lunar 15 gm series, 1981-1992

   Proof silver lunar 1 oz. piedfort series, 1988-1999

   BU and Proof silver Unicorn 1 oz., 1994-1997

Based on these population reports, the following conclusions can be reached:

NGC and PCGS have about the same grading standard for gold and silver pandas.
 
PCGS has a very tough standard vs. NGC in grading lunar coins.

NGC and PCGS have very different standards in grading Unicorns.

The current premium of NGC graded MCC received over PCGS is not warranted, based on those data.
 
Please comment.

Those members who may have similar data of 2013, please contribute. This will provide evidence if NGC or PCGS has relaxed its grading standard recently, since I do not recall to see so many 70 in the past.
    

Offline Birdman

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Re: Grading standard of NGC and PCGS
« Reply #1 on: August 18, 2014, 09:45:05 PM »
Thanks, poconopenn.  One quick thought comes to mind.  My experience is that coins that have had their surfaces conserved can earn higher grades.  More MCC sent to NGC have been conserved prior to grading than for PCGS, right?  So if the same OMP coins are sent to both NGC and PCGS, but more sent to NGC have gotten conserved through NCS, then could that be an important variable?  The same coins to both companies, but some might be a lot prettier when they come to the desk of the NGC grader, directly after NCS?  Also, is a premium warranted (in terms of long term protection of the coin's condition) for an NCS/NGC coin vs a PCGS coin of the same grade with no conservation and with possible PVC residues on its surface?  I wonder what percentage of NGC MCC have been conserved?  I'd guess that > 80% of my collection has been through NCS.  Some were some very hazy or spotted PCGS coins that I sent through NCS to cross to NGC.  But maybe I've been the only sucker keeping NCS in business :)  ?

Offline poconopenn

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Re: Grading standard of NGC and PCGS
« Reply #2 on: August 18, 2014, 11:15:49 PM »
There is no reason to believe that all coins go though NCS are conserved. In fact, the majority coins in OMP submitted were not treated by NCS. In addition, the coin with heavy PVC stain, most likely, is damaged already and has no chance to receive 69 or better. The possible of trace of PVC residues caused by contacting to the pouch, if not visible, will not damage to the gold coin. There is no chance to have PVC stain in capsuled silver coin, unless the coin is in contact with the pouch directly.

Offline KeyDate1/2ozPandas

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Re: Grading standard of NGC and PCGS
« Reply #3 on: August 19, 2014, 12:56:41 AM »

The current premium of NGC graded MCC received over PCGS is not warranted, based on those data.
 

Thanks for sharing this excellent data.

The price difference between NGC and PCGS has less to do with grading rarity, but rather a decision made early in ones collecting journey or personal preference. 

1) If a collector is brand new and has no opinion about either grading company they will tend to go towards the dominant company (NGC) because those coins are much more available on ebay, Zhou, coin shows or coin market.  Once they start collecting, they will often try to make sets from the same grading company, which will reinforce their earlier decision to stick with one grading company.  This logic explains why it is so important to be the first mover in the Chinese market, the early dominant company based on population reports will attract the most new collectors simply because of availability.

2) As a collector matures or their hobby becomes an investment vehicle, then a collector may branch out to other grading companies using the above analysis to determine what is most undervalued and may switch to another company.  Or they may follow the logic in item 1), that most new collectors will go with the dominant company (NGC) and therefore for liquidity and price appreciation potential it is best to stay with NGC.

3) Next collector, investor and dealer preference come into play. 
      a) The holder from the two companies are distinctly different, some people like clear some people like white.  The labels are different also, NGC doesn't state the mint, while PCGS does and shows it in Chinese characters, this is in my opinion the only positive of PCGS vs NGC. 
      b) The guaranty from the two companies are different, NGC is unlimited, PCGS is capped at $1000 for non-secure plus holders. Cost of to get unlimited PCGS guaranty (secure plus) is $45/coin vs $14-$30/coin for NGC, this is huge difference as a dealer submitting hundreds to thousands of coins a year.  Also turnaround time is important, NGC takes 4-10 days vs PCGS 10-40 days. 
      c) Preservation, some holders protect the coin better from toning and hazing.  For my holdings, about 2-3% of NGC coins develop toning after a few years in storage, while 10-15% of PCGS coins develop toning or hazing after similar period. This difference can't be explained by conservation at NGC vs no conservation at PCGS, since I only submit NGC coins to be crossed over to PCGS.

If you haven't guessed I am more partial to NGC (95% of my inventory is NGC) and may even change my user name to "KeyDateNGCPanda" because I believe NGC dominance will continue for another 5-10 years.  Beyond that it is hard to say, because managements may change, alliances will be made, grading innovation, adversity, etc. will all influence which company will be the top in 2020. 

For old Chinese coins pre-1949, I am 100% PCGS because PCGS is the dominant player and as a newbie in that market I bought what is most available for rare coins.   

Offline poconopenn

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Re: Grading standard of NGC and PCGS
« Reply #4 on: August 19, 2014, 03:08:30 PM »
Yes, I agree that liquidity is the major factor for dealers and investors to prefer NGC over PCGS. However, for collectors, the quality of the coin inside the holder is the most important factor. I do not see the quality difference in NGC and PCGS graded pandas based on the data, but the difference in lunar coins is just too great to be ignored.  Potentially, based on the data, about 40% of NGC graded PF69 lunar coins will be graded by PCGS as 68. Grading standard is very important to collectors. For example, Morgan dollar in old green label PCGS holder can received a significant premium over recent graded Morgan dollar because of the tough grading standard in the earlier year.
 
It is my understanding that PCGS has formed some type of partnership with jibi.net and coin001.com inside China. This may improve the market share of PCGS graded MCC inside China in the future, in addition to the currently dominated position in Imperial and Republic coins.
 
Disclosure: I have never submitted any MCC to any grading company and do buy graded MCC in the market. The last time I submitted coin for grading was 1991 to ANACS for proof Indian Cents. In earlier 1990, ANACS was the second best grading company after PCGS.

Offline r3globe

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Re: Grading standard of NGC and PCGS
« Reply #5 on: August 23, 2014, 02:34:42 AM »
Great insight from 2 great minds in the hobby/business. Thank you.

Offline jc888888888

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Re: Grading standard of NGC and PCGS
« Reply #6 on: August 25, 2014, 06:46:21 AM »
Thanks for the fantastic research and insight ,it is highly appreciated ,if I could make one comment this data is for older MCC  and in the case of lunars I think if you run the same data on lets say the last 3 years of lunar varieties you would see the exact opposite,there seems to be an ebb and flow of perceived grading standards for both companies ,12 month's ago I heard comments from a fair amount of people stating NGC is notoriously tough ,now all of a sudden those same folks in the last 60 days are saying NGC is relaxing a bit..one more comment when you talk to Shanghai coin dealers who are relatively new to grading but have adopted it in a big way many grading hundreds of coins at the 2 companies you get a unanimous consensus that they believe NGC is tougher on MCC than PCGS. also I believe there is a fair amount of validity to Birdmans observations about NCS  and here is why I think so ,the data set above all in all are fairly high value MCC when taken as a group. I think collectors are more apt to spend on conservation  when submitting when they have a more significant amount of dollars invested in a coin. thanks again for the great post and research. 

Offline poconopenn

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Re: Grading standard of NGC and PCGS
« Reply #7 on: August 27, 2014, 12:32:51 AM »
The differences of NGC and PCGS grading standard for post-2011 silver and gold panda, as well as lunar are very limited. Both companies graded those coins about 95% better than 69 with more than 50% in 70.  Both companies have a very liberal standard.
 
As collector, I do not like the concept to conserve the coin in Mint State condition unless the coin is damaged and needs to be treated to stop the further deterioration. When the coin surface treated with chemicals, a thin layer of material is removed from surface. It can be detected if the grader is properly trained. For example, the moisture caused white cloud in silver coin can be removed easily, but the coin surface is no longer the same as original smooth and lustrous  and will become dull in a relatively short period of time. In fact, I will be very hesitate to buy the coin from seller who claims that coin is treated by NCS, unless the seller can tell me the type of treatment performed by NCS.


Offline Birdman

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Re: Grading standard of NGC and PCGS
« Reply #8 on: August 27, 2014, 12:35:14 PM »
The possible of trace of PVC residues caused by contacting to the pouch, if not visible, will not damage to the gold coin.

As collector, I do not like the concept to conserve the coin in Mint State condition unless the coin is damaged and needs to be treated to stop the further deterioration.


Poconopenn,

I would be happy for you to convince me that NCS conservation is not necessary unless there is already visible damage to the coin.  That would save me a lot of money in conservation fees! 

My anecdotal observations, however, lead me to believe that there can be a film of PVC (or some other detrimental residue?) on older gold pandas that is not visible, but can degrade the coin over time.  Owing to this suspicion, if I have an older gold panda that I want to grade, I will usually send it to through NCS first as a precaution. 
A few relevant anecdotes:

(1)   I recently bought a batch of PCGS graded gold pandas from a dealer.  The vast majority of the coins were in PCGS MS69 holders, but nearly all of them had some degree of surface hazing.  The dealer mentioned that he had graded all of them from the same OMP sheet a couple years ago. There is no way that they could have earned a 69 grade with the poor eye appeal that they had, so my conclusion is that there was some sort of residue on the surface of the coins from their 20 years in the OMP.  The residue was not apparent to the coin graders, who would have rejected PVC damaged coins, but it was sufficient to degrade the surface of the coins over time.  I sent these coins through NCS and they are in good condition now crossed over to NGC MS69 holders. 

(2)   Although not a gold panda, but still relevant to the issue of non-apparent PVC residue causing long term damage, I bought a PCGS XF40 US Trade dollar with nice chopmarks, but it had developed patches of green PVC damage.  PCGS did an appearance review and ended up removing the green spots, but they had already eaten away parts of the surface of the coin.

(3)   Other examples are NGC MS69 graded gold pandas with arcs of haze that have developed on the coin like the one I posted at the following link. http://china-mint.info/forum/index.php?topic=8206.msg47946#msg47946  I’ve sent coins like these into NGC.  They have agreed that they no longer meet the MS69 grade, and they have conserved the coin to address the problems.  The working assumption I have on such coins is that the arc of haze is from a PVC residue that was on the coin and that developed problems over time.

My question is how many other coins are there out there that look fine now and will earn a MS69 or MS70, but they have a detrimental residue on their surface that will cause problems over 10, 20, or 30 years?  I don’t know the answer to that question, but I am fairly confident that it is not zero.
 
Recently, I walked through the TSA security at an airport.  As is their procedure, they swabbed my carry-on bag with a wand, and then analyzed the cloth for the presence of certain chemicals.  I had a thought.  Wouldn’t it be interesting to use the same technology to test the surface of attractive gold pandas that had been in OMP for decades?  Would the machines (are they Mass Spectrometers or NMR?)  indicate that there is a PVC residue.  I guess until someone does such an analysis, we can only speculate whether the coins have a residue, and whether such non-apparent PVC residue poses a long term risk to the surface of the gold pandas.  Until such an analysis is done, I guess we can only wait and see what develops in the holders of conserved vs non-conserved coins over the next 10 to 20 years.  It is certainly an interesting topic ripe for some hard data.

On a side-note on this topic, the following link is worth a read for those who might not have seen it.  As a caveat, it is written by NGC/NCS who naturally has a financial interest in people wanting to do conservation.

"PVC Contamination on Modern Chinese Coins and the NCS Solution” http://www.ngccoin.com/news/viewarticle.aspx?IDArticle=3003



Offline poconopenn

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Re: Grading standard of NGC and PCGS
« Reply #9 on: August 28, 2014, 12:02:44 AM »
PVC itself is not the cause of PVC stain. PVC will not degraded until the temperature reaches 70 degree (C). The stain is from plasticizer incorporated in the film. It is an oily chemical, phthalate. For soft film, more than 40% of plasticizer is required in the production of film. Plasticizer has a low vapor pressure and can be readily released from film at a temperature above 50 degree C in a relatively short period of time. At room temperature (15-25 degree C), the releasing of plasticizer vapor is very limited. The surface embrittlement or harden of the film is the indication that some plasticizer has been released. The released plasticizer will slowly deposit on the hard surface such as gold coin or outside surface of the plastic capsule to form a film. This film will slowly thicken and becoming visible and sticky, and eventually oxidized to turn into a greenish hard film, which is tough to remove and definitely needs professional help. The NGC examples are typical, the plasticizer film is thick and visible, but not in the stage of color change yet.
 
The removal of thin plasticizer film on the coin surface is relatively easy, by simply keeping coin in the acetone for few minutes. There is no reason to let NCS to make the money.
 
The removal of red copper spot also can be done easily with a cigar lighter, but the coin be treated with acetone to remove the plasticizer film on the coin surface before the heating. In rare instance, the spot is dark brown, the chance is good the spot is formed from other metals, such as silver and iron dust during the minting process, and can not be removed by heating and any chemical treatment may damage the surface.

Usually, the Shenzhen pouch has a lower content of plasticizer and relatively stiff, therefore, a much less chance to release the plasticizer. When the coin inside the pouch can not be moved freely, the chance is good that the coin surface has a plasticizer film already.

Offline Birdman

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Re: Grading standard of NGC and PCGS
« Reply #10 on: August 28, 2014, 07:48:00 AM »
PVC itself is not the cause of PVC stain. PVC will not degraded until the temperature reaches 70 degree (C). The stain is from plasticizer incorporated in the film. It is an oily chemical, phthalate. For soft film, more than 40% of plasticizer is required in the production of film. Plasticizer has a low vapor pressure and can be readily released from film at a temperature above 50 degree C in a relatively short period of time. At room temperature (15-25 degree C), the releasing of plasticizer vapor is very limited. The surface embrittlement or harden of the film is the indication that some plasticizer has been released. The released plasticizer will slowly deposit on the hard surface such as gold coin or outside surface of the plastic capsule to form a film. This film will slowly thicken and becoming visible and sticky, and eventually oxidized to turn into a greenish hard film, which is tough to remove and definitely needs professional help. The NGC examples are typical, the plasticizer film is thick and visible, but not in the stage of color change yet.
 
The removal of thin plasticizer film on the coin surface is relatively easy, by simply keeping coin in the acetone for few minutes. There is no reason to let NCS to make the money.
 
The removal of red copper spot also can be done easily with a cigar lighter, but the coin be treated with acetone to remove the plasticizer film on the coin surface before the heating. In rare instance, the spot is dark brown, the chance is good the spot is formed from other metals, such as silver and iron dust during the minting process, and can not be removed by heating and any chemical treatment may damage the surface.

Usually, the Shenzhen pouch has a lower content of plasticizer and relatively stiff, therefore, a much less chance to release the plasticizer. When the coin inside the pouch can not be moved freely, the chance is good that the coin surface has a plasticizer film already.


Very interesting insights, Poconopenn.  Thanks for sharing.  Do I gather correctly that you are in the chemistry profession?

Do you know whether the China Mint has changed its formula for the plastic pouch over time in response to concerns regarding the levels of certain chemical components?  For instance, perhaps the pouches of the past few years are more archival, with more inert components that are not likely to affect the coin's surface (similar to how they changed the formula for the plastic in coin albums in the US?).  Or perhaps they are just cranking out the same plastic with the thinking that the pouches are not meant for long term storage?

Offline poconopenn

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Re: Grading standard of NGC and PCGS
« Reply #11 on: August 28, 2014, 06:34:38 PM »
Very interesting insights, Poconopenn.  Thanks for sharing.  Do I gather correctly that you are in the chemistry profession?

Do you know whether the China Mint has changed its formula for the plastic pouch over time in response to concerns regarding the levels of certain chemical components?  For instance, perhaps the pouches of the past few years are more archival, with more inert components that are not likely to affect the coin's surface (similar to how they changed the formula for the plastic in coin albums in the US?).  Or perhaps they are just cranking out the same plastic with the thinking that the pouches are not meant for long term storage?

Yes, I was polymer chemist by training and involved precision molding for medical devices using all types of material, including PVC, in my earlier professional life.

Based on the thickness and stiffness of pouch produced by Shanghai and Shenyang Mint over time, I do not believe the formula for those pouches being changed significantly. The Shenzhen Mint pouch is definitely has a lower percentage of plasticizer in the formula.

I should state the plasticizer film more precisely. There is a processing aid, which is also a low vapor pressure oily chemical, in the formulation of PVC film. During the processing, the majority of processing aid will be evaporated, but a very small amount will be released together with plasticizer during storage. The released plasticizer vapor will be deposited uniformly on the surface of the coin and film formed will be very thin. The film may not be continuous or uniform and in the sub-micro thickness, therefore, it is transparent and not visible. However, the direct contact area will be more concentrated and attracted more vapor with time and the thickness will be slowly increased to micro range, therefore, it becomes translucent and visible. Since the majority surface is not in contact with the plastic pouch, the original film will not be visible as long as the thickness of the film remain in the sub-micro range, even it reacts with environment pollutants during the storage.

IMO, if the plasticizer film is not visible at the time coin graded, it will not show up later during the storage for gold coin, but the silver coin may be different, since silver is much more reactive.

Offline poconopenn

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Re: Grading standard of NGC and PCGS
« Reply #12 on: August 28, 2014, 06:46:05 PM »
Here are more data for post-2000 BU silver and gold pandas as well as colorized lunar silver coins graded by NGC and PCGS. Based on those data, there is no reason to believe that NGC has a tough grading standard than PCGS. Both companies grade more than 97% better than 69 for pandas issued after 2011. It is interested to note that PCGS has graded more gold and silver pandas than NGC since 2011.

Offline poconopenn

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Re: Grading standard of NGC and PCGS
« Reply #13 on: October 21, 2014, 02:42:39 PM »
Here are the updated NGC & PCGS population data for the following three series. There were two errors in my previous posted table and they were corrected in these new tables.

1.   Silver BU panda 1 oz. from 1989 to 2000.

2.   Gold BU panda 1/10 oz. from 1982 to 1993.

3.   Silver lunar 15 gm from 1981 to 1992.

The sample size of NGC graded coins for these three series increased during last two months is large enough to conclude that NGC has significantly lower its grading standard recently. While the sample size for PCGS is too small to reach any definite conclusion, but the data does not suggest any significant change in its grading standard. In the case of silver BU panda, the sample size of PCGS is reasonable large to suggest that PCGS may actually have tightening its grading standard.     

Offline silverstar1

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Re: Grading standard of NGC and PCGS
« Reply #14 on: October 21, 2014, 09:56:57 PM »
I would hardly say this is "conclusive that NGC has significantly lowered its grading standards" .There are too many other factors to say that, unless you can personally look closely at a large percent of all of these coins throughout the years it is really nothing more than an opinion. You are wasting alot of time in my opinion. I have personally seen overgraded coins by both companies but have seen way more overgraded by PCGS and do not buy them any more  and of course someone else could have had the opposite experience so there is really no point in arguing it . Thanks for posting the data though.