Converters are an important commodity to sell for any automotive recycler or scrap metal dealer. I can remember 10 years ago when they appeared less important, just another $50 core. We didn’t talk about converter recycling very much and it certainly didn’t command the attention and spending power of every tradeshow exhibit and magazine ad in the industry. But that’s what happens when a core skyrockets from $50 a unit to $350 in a very short period.

From what recyclers tell us, the value of the catalytic converter figures in differently to full-serve and self-serve yards. Most full-serve yards tell us they do not put the value of the catalytic converter into their purchase price for the vehicle, whereas most self-serve yards do. Funny, one full-serve recycler told his sons, “If we have to put the value of the catalytic converter into the price of the car, close the doors.” While a self-serve owner recently said that everyone is basically paying the same price for vehicles at auction and knowing the value of the cats at that time can give you an advantage when buying.

The problem then becomes the falling PGM prices. What happens when you put the value of the catalytic converter into the price of the car at auction and the PGM prices are tumbling like they are now. You have weeks before that vehicle is inventoried, and the converter is sold. You don’t want to be under water on any part of your inventory.

The value of this commodity remains an important issue. It appears that the best of times is clearly behind us now. We are unlikely to see $2,000 Palladium or $30,000 Rhodium ever again, at least not in the next three to five years. More likely you may see $1,350 Platinum, $1,000 Palladium, and $3,000 Rhodium by 2026 says Wilma Swarts, Director of PGM Research at Metals Focus. Easily bringing the average converter prices back down below $100.

The moral of this story is that the best of times is now. With $800 Platinum, $1,200 Palladium, $3,500 Rhodium, and an average unit price slightly north of $100, converter prices are still double what they were 10 years ago. Now is not the time to hold. Palladium and Rhodium prices can and will get worse. The importance of selling your catalytic converter commodities into the current market can not be overstated. Remember, catalytic converters are a commodity and commodity prices are typically volatile, especially when the supply of metal moves into a structural surplus with no demand to strengthen the price. Platinum is the only one of the PGM complex expected to increase in price over the next few years due to its use in NOx emissions control and the Hydrogen economy. Unfortunately, the converters coming out of late model yards today are predominantly Palladium and Rhodium cats with very little Platinum. If you have converters that you have been hoarding for thirty years, then you likely still have a fair amount of Platinum.

Work to get the most out of your converters. We know speed of payment is an issue when you need to reinvest back into inventory. There is a rule of thumb with converter recycling. The faster the payment, the more margin you typically give up. Selling by the piece or by auction yields quick cash while selling on assay takes a little more time but yields a higher net return when done correctly by a professional processor.

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Becky Berube serves the recycling community as President of United Catalyst Corporation, is a Member of the Automotive Recycling Association’s Educational Programming Committee and is a Past President of the International Precious Metals Institute.