You finally made the switch from selling your converters by the piece to selling them on assay. And you have found, like most of us have, that it is worth it. Your average cat sale is up 5-45%, depending on how you were being treated by your buyer.

Now you are in the real game, refining. You are selling your converters based on the actual value of the three metals contained inside your converters. It is exciting. You are hedging and selling metal into the market. Sure, you may have to wait a little longer for your money, but with an early payment and the balance in 30 – 45 days, you are ahead of the game with more money bottom line. You may even decide to hold metal on an account like a brokerage account and delay a taxable sale or use the account as a savings for future planned expenditures.

So, with assay, what could go wrong when you are selling on science and getting paid on actual metal markets?

For nearly 30 years, we have been processing scrap catalytic converters for refining at United Catalyst Corporation, let me explain what can and does go wrong. And, more importantly, how you can fix it.

Count and Weights: How many units or pounds lost is acceptable? In converter processing, everything begins and ends with weights and counts. The weight of your entire lot, converters, pallets, shrink wrap, and all. We start with the end in mind. BOL weights must match. Unit counts must match what you sent in. We are a disassembly facility which means your load comes in, and we destroy it. We completely take it apart. Our goal is to tell you exactly how many converters you sent in and the average value of each unit. At our plant, we balance all weights in and out of processing to one-half of one percent (0.5%). That is our internal tolerance. And we do not mind telling you. Since we are becoming ISO certified, all our workflow aligns to this measure, and all nonconformities must be investigated and resolved before refining. Is this happening where you are processing converters?

Dust: If you are missing weight, you are missing money. If you are missing weight, you are missing money. But if you are missing dust, you are missing significantly more money. It is the ceramic or metallic substrate coating that contains precious metals. So, the dust has the highest concentration of the platinum group metals or PGMs. The dust may be 1-3% of the weight of the load while being 10-20% of the value. Therefore, we suggest you let us de-can for you.  After the count is correct, the de-canning system is paramount to getting paid the right amount. At our plant, every shear has its own very high-end dust collector. Your dust is weighed and added back to your broken honeycomb or catalyst before milling and sampling. We do not have one dust collector going to multiple shears, which would break the chain of custody and leave questions about where your dust is and who keeps it. Is this true of where you are processing converters?

Sampling: In-house XRF, a guide, not a basis for final payment.  Did you know that when you sell on assay and refining terms, you are settling on the results of a sample of your load? It is true. After de-canning the converters, the catalyst must be milled into a powder, and a representative sample must be taken to be tested. That sample is only 5-10% of your material, so it had better represent all your converters. Sampling is science in and of itself. Every particle in your load must have an equal chance of being sampled, and that means it must be blended correctly and for enough time before it comes through the sampler and goes into the sample preparation lab.  There the primary sample becomes smaller and more refined and must be blended or homogenized again, and the moisture must be determined before it is analyzed. This is just for the first analysis or XRF, and it is only plus or minus 10% accurate. We do not pay you based on XRF. We have this lab and get this reading for quality control. So, we know how many ounces to expect within reason and can make an early payment determination. Do you know if you are getting paid on XRF?

Assaying: There is no shortcut to getting paid accurately.  A properly collected sample representing all your converters in your load then goes through two more advanced scientific processes called pyro- and hydro-metallurgy or fire assay with chemical dissolution and atomic absorption (AA) with an Inductively coupled plasma mass spectrometry(ICP[1]MS). Your sample is split eight ways (some of these are held in reserve) and is tested this way by more than one chemist at different times. The results of multiple assays are sent to the lab manager. He or she removes the outliers and reports the median or mean as the official assay for settlement purposes. Now your processor may have fire assay and an ICP lab in-house and pay you quickly based on the assay result they get; however, this is not the same as being paid on the assay result from the refiner or a third party independent lab. If I pay you based solely on the assay result that I get without a witness or a third-party verification, there is no control. I am also not paying you on the same assay that I, the processor, am getting paid on. Processing and refining take time. There are no shortcuts to getting paid accurately. Are you getting paid on assay very quickly from your processor’s in-house lab?

Metal Prices: Do you understand the spread between the spot price and the discounted metal price?  Finally, another area that can be a problem with selling on assay is metal prices. First, let me say that this is a problem for all of us in selling metal. It is an opaque market which means it is hard to see the price clearly. Until a total blockchain solution eliminates trade desk quotes, the problem will exist. Your metal does not come out of refining for about 100 days. To lock in a price for you, we must sell metal forward on a futures contract. Since you are recycling scrap catalytic converters, that means we are selling a product called sponge to coat new catalyst and make industrial products.  We are not selling bars, ingot, or bullion to the investment market. So, there is a discount on the metal price. There is a discount and a lease rate. Both come off the spot or physical prices you see published online. Both can be calculated, but they are not readily disclosed to us. This can be not very clear when you get a metal price that is different than the price you see online. This can also be an area of ambiguity.  The question can and will your processor explain the spread to you?

Selling converters on assay is the way to go. In my mind, it is the only way to ensure that you get paid the most from your converters with a process you can trust. I believe this so much that it is my company’s brand promise to you. But notice the word trust. You still must trust that I, or any processor, is doing what they say they are doing and following the assay rules. It is for this reason that I write these articles. I want you to sell on assay. In truth, I want you to sell to United Catalyst Corporation. But more than anything, I want you to get the most and avoid being cheated. You buy the car. You own the converter. The lion’s share of its value is yours.

If you have questions about this article or any issue about catalytic converter recycling, I or any member of my team at United Catalyst am here to help you. Recycling converters on assay is a journey.  We hope you will rely on us at United Catalyst as your guide.