UCC Article Archive – March 9th, 2018 – Becky Berube

In converter recycling, the best recyclers are partnering with companies that educate. We encourage our customers to sell on assay. But what is an assay and how do you make sense of it? In this, the third installation of our series, Getting the Most from Your Converters with A Process You Can Trust, we are going to discuss, Making Sense of the Assay Report and Final Invoice.  

What is an Assay? Simply put, an assay is a test report. It is an investigative, analytic procedure that measures the content or quality of a metal or ore. An assay is performed in a qualified laboratory with samples that have been accurately collected and represent the composition of the entire load. Since this is the basis of payment, accuracy and methodology count significantly. Therefore, how the sample is created, where the assay is performed, by whom, and by what methods, matters greatly. The process for the platinum group metals (PGMs) contained in auto catalyst, platinum (Pt), palladium (Pd), and rhodium (Rh) requires a combination of methods. A preliminary test using X-ray fluorescence (XRF) can get fairly close (+/- 5 to 10%) but that is not considered accurate enough for settlement. Fire assay or cupellation is the most exact method to collect the metals from the sample into a lead button followed by inductively coupled plasma (ICP) spectrometry and an atomic absorption (AA) finish. When done independently, at a vetted lab, you can understand why this plus de-canning, milling, and sampling takes time, 30-45 days in most instances.  

 Look closely at the assay report. The assay report should have several components that tie out. First, the weight reconciliation. In the first article in the series we discussed the importance of knowing your numbers before you ship: the ceramic, metallic foil, empty, and DPF count which make up the total whole units in the load. The assay report will likely be just the weight of the ceramic units after de-canning, milling, and sampling. You should see at least three weights: gross (after de-canning), net wet (after milling with any inert or trash removed), and net dry (after the moisture has been determined and the weight of the sample is subtracted). Next, you will see the test results of the assay in the form of parts per million (PPMs). The net dry weight multiplied by the parts per million for each metal will give you the contained ounces (100%). Actually the formula is: Contained troy ounces = ((net dry lbs. x PPM/1,000,000)*14.5833)). No one keeps 100% of the contained metal. Typically, the returnable ounces are somewhere around the high nineties for Pt and Pd and the high eighties/low nineties for Rh since it is the harder metal to extract. Formally, this is the contractual metal return rate. In addition to the contractual metal return rate, there is the date that the metal comes out of the refinery which is the metal due date, somewhere around 12 weeks after arrival. Typically, you are actually getting paid early on the results of the sample that has been assayed less the recycling and refining costs. By taking the payment when the assay is final and before the metal becomes due, there is interest or finance charges often included in the final settlement amount. 

Understand the final invoice. The final invoice should clearly show the returnable ounces of each metal due you, the price for each metal, and the date the metals were sold. This creates the total metal value for the invoice. (Please note the metal price will be discounted from the published price of bullion. The reason for the discount is that you are selling industrial grade precious metal, called sponge, versus the investment grade precious metal, called bullion or ingot.) Normally, you can hedge or price the metal at any time 2 weeks prior to arrival at your processor and up to the metal due date, 12 weeks post arrival at the end refiner. You will receive the total metal value less the customary recycling costs. Recycling costs include everything done to the scrap catalytic converter to turn it into precious metal for reuse. The charges can be combined into one charge or be itemized depending on how the recycling company chooses to report it. The charges may include, but are not limited to, de-canning, milling, weighing, sampling, assaying, treatment or smelting, refining, and interest charges. Much like the price tag on any consumer or durable good, the cost of the good it not itemized. As a rule of thumb, you can estimate that a ceramic converter costs approximately 10 – 12 percent to recycle and a metallic foil converter 12- 15 percent.   

 Pick your recycling partner carefully.  To reiterate the major point of this series of articles, you can get the most from your converters with a process you can trust. Assay-based selling offers you this opportunity to participate directly in the recycling and refining process to maximize your bottom line. Again, the best recyclers partner with companies that educate. It is possible with assay-based selling as with selling by the piece, to introduce layers of companies that make margin on you. When you know your numbers before you sell; understand the importance of weights; make sense of the assay report and final invoice; learn to track your key metrics; and pick a reliable partner you will be far less likely to fall prey to unethical trade practices and leave money on the table.