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KNOW YOUR NUMBERS

18 March 2025

UCC Article Archive – January 18th, 2018 – Becky Berube

 

In converter recycling, the best recyclers know their numbers and partner with companies that educate. Knowing key metrics about your converter loads safeguards you against misleading key metrics, like your average price per unit, and increases your bottom line.  

 

Every recycler looks at his or her average converter price. It’s an easy metric to track but an even easier number to get wrong if you didn’t get an accurate whole-body count before you shipped. You would be surprised how many recyclers consider the average sales price as gospel, but do not take the time to count their load before selling it. Relying on your processor to count for you, could be costing you.  

 

Let’s look at an example.  

If a Gaylord box holds approximately 100 converters and the average price per unit is $75, the box would be worth $7,500. 

If your dismantler can only fit 80 converters in the box, due to pipes or the size of the box, and you get paid $7,500, your true average is $93.75. 

If your dismantler can fit 120 converters in the box, and you get paid $7,500, your true average is $62.50. 

 

The truth is, if you don’t count the units before you sell, or if you rely on your buyer or processor to count for you, then you really don’t know your true average. 

 

This is a simple example.  

 

The problem of determining your average price per unit is compounded by empty and metallic (foil/wire) converters that change your count and the way your average is calculated.

 

Take our example above.  

If you have a box of 100 converters, and I report to you 80 ceramic converters, 15 empties, and 5 metallic converters, and pay you $7,500, I will lead you to believe your average for the 80 ceramic units is $93.75. 

However, if all 100 are full converters, and I pay you $7,500, then your true average is still $75 per unit, but I led you to believe it was $93.75. 

 

The point is, if you don’t count the units, including empties and metallic converters, you don’t really know what you have in inventory and your average is whatever we tell you it is. Educated recyclers know how important the count is to tracking profits.  

 

The average unit price is just one of many key metrics when it comes to converter recycling. There are many more. Each key metric effects your profits and how you view and choose your processing company. Unfortunately, it is very easy to be misled in converter recycling.  

 

To avoid common pitfalls in converter recycling, we suggest the following actions. 

 

Know your count before you sell. Train a key person to count and inspect the converters before you package them up. Teach him or her the difference between the ceramic and metallic (foil/wire) converters. And if you are selling on assay recovery, send in the empties if they have just a little catalyst in them. A good processor will cut those and add that material. Also, if it’s genuinely empty, you and the processor will both agree that it is.  

 

Become an educated seller. Work with a company that believes in educating you about your loads. A good company will not hesitate to explain your invoice and how the numbers are derived. With selling on assay recovery, your results can be verified. That’s the beauty of the program. However, as with all science and commodity sales, we are taking something complex and simplifying it for ease. This lack of uniformity across companies that process and refine, makes you an easy target for skimming weight, actual value, and YOUR profits.  

 

Audit your program. Become a data junkie. Learn all the key metrics to avoid misleading data, like your average converter price, and track true sales. You will be amazed as you gain data points, how easy it is to get misled.  

 

When you look at a box of converters that are ready to be sold, ask yourself whether each converter worth $75 or $93.75? Multiply this by the number of converters you are shipping, and you will see the importance of knowing before you ship. If you’re going to live by that average price per unit, you don’t want to leave that number up to someone else’s discretion.  

 

At United Catalyst Corporation, we educate recyclers every day. Stephen R. Covey once said, 

“If the ladder is not leaning against the right wall, every step we take just gets us to the wrong place faster.” We believe data doesn’t lie IF you know how to it was derived and how to interpret it.  

Getting the Most from Your Converters with A Process You Can Trust: Making Sense of the Assay Report and Final Invoice

18 March 2025

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. 

Getting the Most from Your Converters with A Process You Can Trust: The Platinum Group Metals (PGM) Market Watch

18 March 2025

UCC Article Archives – May 15th, 2018 – Becky Berube

 

During the third week of May each year, stakeholders in the platinum industry gather in London, England for what is known as Platinum Week. Receptions, lectures, and forecasts abound. 

 

At our company, we encourage recyclers to sell catalytic converters on assay; the analytic procedure that measures the content of precious metals in the catalytic converters. Take away the ambiguity of grading and sell the precious metals contained in your converters.  

 

But what affects the price of the Platinum Group Metals(PGMs)? Three broad factors: 

 

Macroeconomics 

Precious metals are a safe-haven investment. When economic indicators are strong, precious metals are not the investment of choice. That means when the equities are booming, the dollar is strong, yields on 2 and 10-year US Treasury bonds are increasing, inflation is low, and unemployment is decreasing, precious metals are less attractive to investors. 

When the equity market falters, the dollar weakens, Treasury yields decrease, interest rates rise, and unemployment fails to decrease, investors increase their appetite for precious metals as a hedge against a weakening economy. 

 

Supply – Demand Fundamentals 

Platinum demand has decreased with less use in auto catalyst loadings and the shrinking European diesel market. Japanese investors have bought less platinum and Chinese jewelry fabricators using less platinum in recent years. Mining supply is flat and there is a modest surplus of platinum in the market. The bright spot is the increase of physical demand for platinum in China as evidenced by increased imports, and the relationship of platinum to gold and the positive outlook for gold. 

At the time of this writing, May 15, 2018, the platinum price is at its lowest level since mid-December with support at $900 and resistance at $950.  

 

5 Year Platinum London Fix PM Daily with 60 and 200-day moving averages 

The industrial demand and the supply – demand fundamentals remain strong for palladium as the demand for gasoline emission vehicles increases in Europe, light duty vehicle sales in China continue to rise, and palladium loadings in auto catalyst increases.  

At the time of this writing, the palladium price is also down with support at $900 but resistance at $1,020. 

 

5 Year Palladium London Fix PM Daily with 60 and 200-day moving averages 

The minor metal contained in auto catalyst, Rhodium, is trading at a 7-year high at or above $2,000. 

Geopolitical Factors 

Since 80 percent of the world’s supply of platinum group metals comes from mining in South Africa and Russia, any disruption in the supply affects the price of the metals. A looming trade war, sanction concerns, adverse weather, energy outages, labor disputes that interrupt work and the supply will spike the price of these metals. When fears subside, investors will unwind or sell off their positions and the metal price can drop sharply as we have seen in recent weeks. 

All of this to say, that even when the supply-demand fundamentals are strong, headlines still move markets. Countries coming together or warring impact investor sentiment and metal prices. 

In converter recycling, the best recyclers are partnering with companies that educate. At our company, we believe selling on assay with refining terms is the best way to recycle scrap catalytic converters. Learning the way assay and refining works and how to avoid unethical trading practices takes time, but if done properly with a reliable recycling partner, yields much greater value. 

Getting the Most from Your Converters with A Process You Can Trust: The Scoop on Interest and Metal Price Discounts

18 March 2025

UCC Article Archives – April 11th, 2018 – Becky Berube

 

In converter recycling, the best recyclers are partnering with companies that educate. We encourage our customers to sell on assay, the analytic procedure that measures the content or quality of a metal or ore contained in the catalytic converters. In this, the fourth installation of our series, Getting the Most from Your Converters with A Process You Can Trust, we are going to discuss, The Scoop on Interest and Metal Price Discounts.  

 

In the first article of this series, Getting the Most from Your Converters with A Process You Can Trust, we emphasized Know Your Numbers. We strongly advise our customers to know their count before they sell. If you don’t have an accurate unit count, you won’t know your true average. In the second article, we discussed why it is necessary to your bottom line to Understand the Importance of Weights.  If you’re missing weight during processing, you’re missing money. In the third article we explored Making Sense of the Assay Report and Final Invoice. Both can look like mumbo-jumbo, but when you understand what should be on them, you are less likely to fall prey to any unethical practices and leave money on the table. 

 

Assay reports and final invoices are complex no matter how they are reported to you. Interest and metal price discounts only add to their complexity. 

 

What is interest? Why do some companies charge interest and others don’t? The bottom line in refining converters is that you are getting paid on the assay result of the sample which typically takes 3 to 5 weeks; but the physical metal is not available for approximately 10 to 12 weeks which is called the metal out turn date. Therefore, any time you take a payment before the metal out turn date, there is interest. Basically, the refiner sells its metal early to make a payment for your metal which is not yet available. For this reason, the refiner charges you a simple interest amount on the number of days you use the metal and money before the metal out turn date. For example: $80,000 x .06 / 360 = $13.33 / day interest. $13.33 x 90 days = $1,200.00. The bottom line is that whether a company shows the interest on your invoice or not, it exists. And if you need the payment to buy more cars or pay overhead, it is just a cost of doing business. The increased margin you are realizing by selling on assay should help make up for any interest charges. If you do not need the payment right away, you can save the interest by waiting to take payment until metal out turn date.  

 

If I wait to take payment will I be exposed to market price fluctuation? The answer is no. If you choose not to take an advance payment, with most companies, you can still hedge (lock-in) your metal prices even before you take any money. In this way, you have guaranteed your price against a downward market, but, likewise, you have also limited yourself against gains in an upward market. Remaining open, or playing the market, is considered speculating and should be a strategy only if you can afford to lose. Otherwise, locking in your metal prices, and continuous selling into the market when you ship, is risk neutral and resembles dollar-cost averaging in investing.  

 

 Why is the metal price on my invoice not the same as the price I see on the internet? The price you see published on the internet is the buy and sell price for investment grade metal or bullion. When you recycle scrap catalytic converters on assay and refining terms, you produce an industrial grade of precious metal known as sponge. This form of precious metal is sold back into the market place to make fresh applications. Precious metal in this form is discounted when it is sold. It is important for you to ask your processor how much they are discounting each metal on average so that you can track the price. Several factors can affect this discount. Because you are selling metal at a date in the future, your price is likely based on a futures price versus a spot (immediate cash) price. Expect the discount for Rhodium to be significantly more than Platinum or Palladium for two reasons: it is in shorter supply, and it has a miniscule trading volume. Often the price quoted for Rhodium is spot or whatever the refiner or trading desk can get for the metal that day versus a futures contract. 

 

Selling on assay with refining terms is the best way to recycle scrap catalytic converters. In fact, it is the only way to recycle a converter. It happens once it leaves your facility whether you sell it this way or not. Learning the way assay and refining works and how to avoid unethical trading practices takes time, but if done properly with a reliable recycling partner, yields much greater value. Get the most from your converters with a process you can trust. Email or call me with any questions you have regarding this article or previous articles in this series. 

Getting the Most for Your Converters with A Process You Can Trust: Selling Basics and Advanced Principles

18 March 2025

UCC Article Archives – October 12th, 2018 – Becky Berube

 

For those of us who travel to conferences and trade shows with recyclers, it is one of the busiest times of the year. It is also the time when we get to do the most educational training sessions. Personally, if I could, I would travel all year educating recyclers on developing a profitable converter recycling program. We educate for two reason: First, so that you make the most money you can from selling your converters. Second, so that you cannot be taken advantage of when selling them. 

Selling units in person or by software application. 

Whether you sell by the unit in person or by application, the buyer normally turns around and sells the units on recovery by assay for a higher value. Oftentimes, a grading application cannot accurately predict the value of the load of converters will yield on assay. There is a significant potential margin of error with converter applications.  

Selling units by bid or across-the-board pricing. 

In our estimation this is like rolling the dice, sometimes you win, sometimes you lose. If your converters are of lower value than the price offered, you win; if your converters are of higher value, you lose. In most instances, like selling by the piece or bid, the converters are being turned around for a higher value on assay. Margin is left on the table.  

No two converters the same. 

If you were to take two converters coated on the same day for the same vehicle application, and you sold two identical cars to two neighbors who worked at the same plant each day, who’s vehicles after 10 years were destroyed by the same flood, and test those two converters by assay, the converter values would not be the same. This is one of the main reasons to sell converters on assay. No two converters are the same. 

Selling converters by assay. 

There is only one way to recycle a scrap catalytic converter. Destroy it. Sample it. Refine it. Sell the Platinum, Palladium, and Rhodium. Simple in theory, but more complicated in practice. More involved, but more profitable IF you understand how it works.

 

Average Price Per Unit. Know your count.  

 

Dismantle.  

Each recycler believes they know the average price per unit that was sold. If you don’t know your count before you sell and if you don’t confirm your count with your processor, then you cannot know your true average. The price per unit can be manipulated in several ways by over or under estimating the units which skews the average. 

 

Average Price Per Pound and Pounds Per Unit. Mass balance all weights. 

 

De-can. Mill. 

When converters are destroyed by de-canning and milling the result is catalyst and dust. It is important that you, the customer, receive all the catalyst and dust. These two items become the gross weight of your load that will be sampled and paid for. There is also the steel from the cans and the packaging materials that need to be accounted for in a mass balance. All weights in to all weights after processing should roughly add up to 99.5 percent. A loss of no more than 0.5%. 

Sample. 

How a sample is collected is one key to determining the accuracy of an assay result. The sampling method should be verifiable and accurate. Moisture and inert material like insulation should be reasonable. The normal range for both is 1 – 3 percent. The weight before the moisture is determined is the net wet weight, after the moisture, is the net dry or settlement weight. Your price per pound can be manipulated. The less weight, the higher the average weight per pound. BUT, if you are missing weight, you are missing money. Track your average pounds per unit to check this. Late model yards might have an average weight per unit of 1.8 – 2.0 lbs. per unit; other yards might have an average of 2.0 – 2.3 lbs.  

Assay. 

How your sample is assayed to determine the amount of metal contained is another key to proper settlement. The most reliable method for determining the precious metals contained in auto catalyst is fire assay combined with induction coupled plasma (ICP) spectroscopy and an atomic absorption (AA) digestion. It is not the norm to settle on x-ray fluorescent (XRF) analysis. The margin of error for this method can be plus or minus 10% in some instances.  

Where the assay is performed and by whom is paramount to getting paid the most. For instance, you should know if the assay is performed at the processor’s lab, the refiner’s lab, or by an independent third-party lab. We prefer to settle with recycler’s not on our lab analysis but on the “sample of record” at the end refiner or with an independent third-party lab. We consider the results at our lab to be quality control, not the final assay, for the final settlement. 

Market prices. 

Recently, I was asked about the spread on market prices between what is published and what is received on your invoice. There are several factors that affect the spread or discount we receive on market prices for metals. First, there is a discount for delivering industrial grade metal versus investment grade metal. Second, there is a discount for when metal will be delivered: today, 30, 60, 90, 120 days. The converters you recycle today will not be in metal form for at least 84 – 90 days. See diagram. This means we sell metal forward and that price is discounted. Locking in a metal price early carries a lease rate or discount. Taking money early carries a finance charge. These charges are typical in assay-based selling whether you see them or not. Finally, if the metal is in short supply at the refiner, the spread or discount is also higher because the refiner is being charged a higher lease rate to get metal. This has been the case for Palladium most recently. 

In converter recycling, the best recyclers are partnering with companies that educate. At our company, we believe selling on assay with refining terms is the best way to recycle scrap catalytic converters. Learning the way assay and refining works and how to avoid unethical trading practices takes time, but if done properly with a reliable recycling partner, yields much greater value.  

Platinum Club – February Notes on PGMs and Autocatalyst Recycling

6 February 2025

It is February 2025, the US election is behind us, there is a new Administration, with policies that have geo-political and economic impacts that are yet unknown for Platinum Group Metals (PGMs).

 

Price Movement

When it comes to the price action for PGMs and scrap catalytic converters there are some historical and some forward-looking dynamics at play. As of today, the price of platinum is $987 per ounce, down approximately 29% from its 2014 price of $1,390 per ounce. Palladium has seen a rise to $1,055 per ounce, reflecting an increase of about 24.9% from its 2014 price of $845 per ounce. Rhodium has experienced a significant surge, with its current price at $4,850 per ounce, marking an impressive increase of around 297.5% from its 2014 price of $1,220 per ounce. A decade ago, the average price of a scrap catalytic converter was $50 and today is approximately $100 per unit. These changes highlight the varying market dynamics and demand shifts for these precious metals over the past decade.

 

Current Market Dynamics

Supply and Demand:

  • Platinum: The platinum market is expected to remain in deficit due to limited supply and increasing demand. South African production may see some improvement, but challenges like potential mine closures and reduced output persist.
  • Palladium: Palladium is also facing a deficit, driven by subdued secondary supply from recycling and a decline in demand due to the substitution of platinum in catalytic converters.
  • Rhodium: Rhodium prices are influenced by similar factors as palladium, with supply constraints and reduced demand from the automotive sector.

Automotive Industry:

  • The shift towards electric vehicles (EVs) is reducing the demand for palladium and rhodium, as these metals are primarily used in catalytic converters for internal combustion engine (ICE) vehicles. However, hybrid vehicles still require these metals, providing some support to their demand.

Economic Factors:

  • Inflation and Interest Rates: Higher interest rates increase the cost of borrowing, which can reduce industrial activity and demand for these metals. Additionally, a stronger US dollar makes these metals more expensive for buyers using other currencies, reducing global demand.

Geopolitical Events:

  • Political instability in major producing countries like South Africa and Russia can disrupt supply chains, affecting the availability and prices of these metals. The Russia-Ukraine conflict, for example, has had significant impacts on the supply of palladium.

Industrial Applications:

  • Beyond the automotive sector, these metals are used in various industrial applications, including electronics and green technologies like hydrogen fuel cells. Innovations and shifts in these industries can impact demand.

Outlook with the New US Administration

The Trump administration’s policies are expected to have several impacts on the prices of Platinum, Palladium, and Rhodium:

Tariffs and Trade Policies:

  • The administration’s proposed tariffs on imports could increase production costs for industries that depend on imported metals, potentially leading to higher prices for consumers. This could also encourage domestic production of these metals, although expanding production capacity takes time and capital.

Infrastructure Development:

  • Significant infrastructure development projects could boost demand for industrial metals, including platinum, palladium, and rhodium. However, the scale and timing of these initiatives will determine the overall impact.

Inflationary Pressures:

  • Tariffs and rising demand from infrastructure projects could drive inflation by increasing production costs for manufacturers. Higher inflation could lead to higher interest rates, which would strengthen the US dollar and potentially reduce the attractiveness of these metals as investments.

Environmental Policies:

  • The Biden administration’s focus on green technologies and reducing carbon emissions could increase demand for platinum and palladium in hydrogen fuel cells and other clean energy applications.

Overall, the market dynamics for Platinum, Palladium, and Rhodium are influenced by a complex interplay of supply and demand, economic factors, geopolitical events, and industrial applications. The new US administration’s policies are likely to create both challenges and opportunities for these metals.

Challenges

Tariffs and Trade Policies:

  • Inflationary Pressures: The new administration’s tariffs on imports could increase production costs for industries that depend on imported metals, leading to higher prices for consumers. This inflationary pressure could result in higher interest rates, which would strengthen the US dollar and potentially reduce the attractiveness of these metals as investments.
  • Supply Chain Disruptions: Tariffs and trade restrictions could disrupt the supply chains for platinum, palladium, and rhodium, particularly if key suppliers like South Africa and Russia are affected. This could lead to supply shortages and increased prices.

Economic Policies:

  • Higher Interest Rates: To combat inflation, the administration may support higher interest rates, which can reduce industrial activity and demand for these metals. Higher rates also strengthen the US dollar, making these metals more expensive for buyers using other currencies.
  • Consumer Spending: Inflation and higher interest rates can pressure consumers’ pockets, potentially reducing demand for products that use these metals, such as automobiles and jewelry.

Environmental Regulations:

  • Emission Standards: Stricter emission standards could increase the demand for platinum and palladium in catalytic converters, but the shift towards electric vehicles (EVs) may offset this demand. EVs do not require these metals, which could reduce their overall demand.

Opportunities

Infrastructure Development:

  • Increased Demand: Significant infrastructure development projects could boost demand for industrial metals, including platinum, palladium, and rhodium. These projects often require substantial amounts of these metals for construction and manufacturing.

Green Technologies:

  • Hydrogen Fuel Cells: The Biden administration’s focus on green technologies and reducing carbon emissions could increase demand for platinum and palladium in hydrogen fuel cells and other clean energy applications. This shift towards sustainable energy sources presents a significant growth opportunity for these metals.

Domestic Production:

  • Encouraging Domestic Output: Tariffs on imports could encourage domestic production of these metals, although expanding production capacity takes time and capital. Increased domestic production could reduce reliance on foreign suppliers and stabilize supply chains.

Investment Demand:

  • Safe-Haven Assets: During times of economic uncertainty or market volatility, investors may flock to safe-haven assets like precious metals, driving up their prices. The administration’s policies could create an environment where these metals are seen as a stable investment option.

These challenges and opportunities highlight the complex interplay of factors that will influence the prices of Platinum, Palladium, and Rhodium under the new US administration’s policies.

The Trump Administration has signaled a shift in U.S. energy and climate policy, focusing more on fossil fuels and less on green technologies and carbon emission reductions. There is a strong emphasis on domestic fossil fuel growth, prioritizing energy independence and economic growth through traditional energy sources like oil, gas, and coal. Environmental deregulation efforts have been made to expedite reviews and permitting processes, benefiting fossil fuel projects but potentially slowing the development of green technologies. Despite the focus on fossil fuels, there is also support for nuclear and geothermal energy as part of the broader energy strategy.

Overall, the administration’s policies are likely to create some challenges for the development of green technologies and efforts to reduce carbon emissions except for increased production of hybrid vehicles. However, there may still be opportunities in areas like nuclear and geothermal energy.

The positive news for PGMs could be a revitalized economy with increased gas-powered and hybrid car sales amidst a backdrop of supply deficits due to production and trade issues in South Africa and Russia. The following are macroeconomic indicators to watch. There is generally an inverse relationship between the value of the US dollar and the prices of these metals. When the US dollar strengthens, the prices of platinum, palladium, and rhodium tend to fall, and vice versa. So, a slightly weaker US dollar is better for PGM prices. Lower interest rates can weaken the US dollar and increase inflation, making precious metals more attractive as a hedge against inflation, thereby driving up their prices; however, interest rate hikes to fight inflation, therefore, can have the opposite effect.

Conclusion

A $100 scrap catalytic converter is better than a $50 converter, but not as great as a $300 converter average. All things considered, there is no likelihood of a spike in price. Remember, this is where the markets are today, and palladium and rhodium are both higher than a decade ago. Prices may remain bumpy within the recent range. Deploy a dollar-cost averaging strategy of selling material into current markets at regular intervals and attain the annual yearly average for PGMs.

For daily updates on the PGM markets, subscribe to the United Catalyst Corporation daily e-newsletter, the 60-Second Report, TEXT Daily to 844-713-PGMs (7467). To learn more about recycling converters on assay or the United Ecosystem Bid Tool, you can also call an Account Executive at 864-824-2003 or email a specialist at [email protected].

Becky Berube has served the recycling community for over thirty years. Based in Greenville, South Carolina as President of United Catalyst Corporation, she writes a monthly educational column for the industry and serves on several ARA and ReMa committees. She is a newly appointed Advisor on the US Industry Trade Advisory Committee on Critical Minerals.

She was a recipient of a 2023 South Carolina Women in Business Award and is a mentor in the Women in PGMs program. Additionally, Becky serves as an At-Large Director of the ReMa Southeast Board, Co-Chair of the IPMI Preventing Auto Catalyst Theft Committee, and is on the Board of Directors of the International Precious Metals Institute (IPMI), where she is a past President.

Converter Recycling 2025: Hold. Fold. Sell.

31 January 2025

In the iconic words of The Gambler, “You’ve got to know when to hold them, know when to fold them, know when to walk away, and know when to run.” These words ring truer than ever in today’s shifting platinum group metal (PGM) market. After the historic highs of 2021 and 2022, PGM prices have cooled significantly, with the average catalytic converter value dropping by more than half. Prices have held steady throughout 2024 (See charts below). Many recyclers are stockpiling converters in response—an increasingly risky move in light of record-breaking catalytic converter theft.

 

 

So, where are PGM prices heading in 2025? If only we had a crystal ball. Current market conditions draw parallels to the early 2000s, with a strong dollar, persistent inflation, global economic uncertainty, and supply disruptions from Russia and South Africa. Back then, palladium spiked to $1,100 per ounce before plunging 60% once production stabilized. Similarly, platinum hit a record-high of $2,250 per ounce in March 2008 amid South African supply issues, only to fall to $774 by November. And rhodium, which soared to $10,025 per ounce in 2008, crashed by 90% before the year’s end. These fluctuations remind us that while PGM prices can skyrocket, rebounds take time—often measured in years, not months.

 

According to Johnson Matthey’s 2024 PGM Market Report, the platinum market is poised to experience its largest supply shortfall in a decade. Primary supply is predicted to decline by 2%, with Russian shipments normalizing after significant sales of mined stocks in 2023. In South Africa, efforts to process untreated platinum stockpiles will help counterbalance restructuring by major PGM miners. Despite these supply challenges, demand for platinum is projected to remain robust, driven by investment in the glass industry and optimistic market sentiment. Automotive platinum use, though slightly contracting due to reduced diesel car production, will remain near fifteen-year highs.

 

Meanwhile, deficits in palladium and rhodium markets are expected to narrow. Automotive demand for these metals is forecast to decline as global gasoline car production slows and manufacturers reduce PGM content in catalytic converters to cut costs. However, secondary supply is increasing, particularly through improved automotive recycling in China, where processors are handling previously hoarded scrap. These developments have stabilized palladium and rhodium prices following the sharp declines of 2023, aided by the consumption of surplus inventory accumulated during the pandemic years.

 

For recyclers and investors, long-term strategy is key. Reflecting on my early career at Putnam Investments, I recall the importance of dollar-cost averaging—a method of managing price risk by consistently investing the same amount over time to achieve an average price. Applied to the recycling industry, this approach suggests that regularly selling converters, regardless of market prices, can help smooth out the highs and lows. Rather than holding onto large backlogs, consider selling your most recent acquisitions at today’s rates. If you partner with a reputable processor, you may also be able to process older inventory and hold the recovered metal on account, allowing you to sell later when prices improve.

 

Looking ahead, analysts predict platinum will play a vital role in the hydrogen economy, with the potential to surpass palladium in value over the next three to five years. Meanwhile, rhodium remains essential for reducing NOx emissions, with stricter global regulations driving increased demand.

 

The PGM market may be unpredictable, but with a measured, strategic approach, recyclers can navigate its ups and downs successfully. Whether you hold, fold, or sell, the key is to act with intention, not out of fear or speculation.

Post US Election – What Will the Impact be on PGMs and Converter Prices?

20 November 2024

“I am going to wait to sell converters until after the election.” The most common comment heard by our sales force amongst independent automotive recyclers. Hoarding converters has become prevalent with some since the sharp decline in PGM prices over the past several years. With other commodities like steel, aluminum, and copper remaining stronger, and part sales remaining robust, there is no pull on the purse strings to give up the nest egg of scrap catalytic converters in the hope that they will appreciate in the future.

We do not see the same strategy with publicly traded or PE-backed scrap metal and automotive recycling firms that continually sell all commodities into the market to bolster monthly revenue and earnings.

 

So why did platinum and palladium spike just before the election?

Just before the election, palladium prices had surged over 20%, exceeding $1,200, driven by supply concerns tied to potential G7 sanctions on Russian palladium and the recent production cut of 200 koz. from Sibanye Stillwater in Montana. The market’s reaction to the brief talk of sanctions was overblown, leading to a swift correction.

The day after the US Election, I asked several precious metal experts the impact of the US Election on PGM prices in the short to long term. Here is what they had to say.

 

Dr. Jonathan Butler, Head of Business Development and Strategy, Mitsubishi Corporation International (Europe)

The election was very decisive, so the market reaction happened much quicker than many of us expected, resulting in a dollar rally, higher yields, and a sharp drop in USD-denominated commodity prices. This, combined with last night’s Fed rate decision, has completely reversed the Pd rally for now.

In the longer term, from a macro perspective, President Trump’s plans for increasing tariffs are quite inflationary – along with curbs on immigration, these policies will likely lead to higher inflation and eventually higher interest rates. The resulting stronger dollar, as the U.S. economy outperforms, will put further downward pressure on USD-PGM prices.

However, the prospects for industrial demand for PGMs are quite positive – President Trump’s “drill, baby, drill” policies will obviously support the oil and gas sectors and ultimately increase PGM use in petrochemicals/oil refining and through accelerated growth across the broader economy. As for auto demand, I think it’s a mixed picture: on one hand, Trump will try to stimulate the U.S. auto industry (via protection and other measures), and economic growth should lift auto sales; on the other hand, he is likely to oppose tougher emissions mandates (as he did in his first term). Although Elon Musk has become very close to Trump during the campaign, I wonder what it will mean for EV policy – I don’t believe Trump is personally a fan of EVs and has been on record opposing EV mandates, but whether this creates space for hybrids remains to be seen.

So, will this be a “golden age” for PGMs or not? I sense that there are more positives here than negatives from a demand perspective, but it’s the macroeconomy that will ultimately determine prices – and the stronger dollar and higher-yield environment may continue to weigh on the precious metals complex.

 

Wilma Swarts, Director of PGM Research, Metals Focus

Although it’s still early days, the Republicans’ increased legislative influence could foster optimism around demand, particularly with the potential for extended internal combustion engine use at the expense of electric vehicle penetration. This shift may place upward pressure on platinum group metal prices. However, a potential rollback of commitments to tighter emissions standards, as seen previously with EPA regulations, could dampen PGM demand. Higher PGM prices, in turn, could stimulate increased scrap supply, as many of the recyclers you mentioned were waiting to see the election outcome.

 

Dr. Sandeep Kaler, Market Strategy Analyst SFA (Oxford) Limited

It is tricky to predict the exact outcome for PGMs, but I think it is a slight positive compared to a Democratic win. We may see ‘stronger for longer’ PGM demand from the U.S.

Trump is notably less pro-EV than Harris, despite Elon Musk’s endorsement. However, I think it will be very difficult to completely reverse four years of EV support, especially since Republican states have been significant beneficiaries of the IRA and funding for EV and battery factories. What we will likely see is a slowdown in EV adoption if the $7,500 consumer credit and other benefits are revoked. Ultimately, this is good for ICE and the ‘legacy’ automakers – GM, Stellantis, and Ford who have built their core businesses on ICE and have recently been pressured to switch their portfolios to include more EVs.ac

For the autocatalyst recycling market, numerous factors come into play. Support for the auto industry could drive up vehicle sales and be positive for recycling. However, any supply chain disruptions resulting from tariffs and trade negotiations could counteract this. Trump has also been noted for his inflationary policies – the impact of higher interest rates on auto loans could lead people to hold onto their vehicles for longer or opt for a secondhand purchase, potentially suppressing recycling volumes for longer.

Palladium prices have seen a very sharp decline over the past few days; this is the correction I predicted. The talk of sanctions was relatively short-lived, and the rally was an overreaction from the market.

 

Joseph Brooks, Opinion-Editorial

And here we go; we’ve got our result. Pollsters weren’t even close, again. Now you have some certainty? Maybe.

Equities are surging alongside the dollar, yields are up; gold and silver are taking a hit, while crypto is also moving to all-time highs.

Oil is also lower, as Trump is perceived as wanting to increase production. It’s interesting that PGMs are down, likely due to speculative moves based on gold and silver declines. Cheaper fuel should benefit the ICE, but it’s still early days. The “buy the rumor, sell the fact” trade is currently in play. Remember, this is why you hedge.

Trump’s focus on U.S. drilling and tariffs on foreign vehicles should be good for PGMs in the medium to long term. Once we get past today’s knee-jerk selling, we should start building a stronger base on ICE demand. For what it’s worth, the flip side is that the G7 likely won’t impose any embargoes on Russian PGMs. However, the first point should take precedence, as PGM prices were stronger the last time we had access to Russian PGMs.

Most economists believe Trump’s tariff plan will significantly increase inflation; one school of thought is that central banks may stock up on gold as a hedge against the dollar. Time will tell.

 

From the author:

Historically, PGM prices are relatively moderate compared to their peaks over the past two decades. Between 2014 and 2024, platinum prices decreased by approximately 29%, while palladium rose by about 25%, and rhodium saw a significant increase of around 298%.

Commodity sales are an important source of cash flow for businesses in today’s economy. Take advantage of dollar cost averaging by selling continuously into the market year over year. But if you have an appetite for speculation, treat your PGMs like any other investment by putting them into a tradeable form (troy ounces) with a reputable company in a pool account which can be valued as an asset until a future sale.

 

For daily updates on the PGM markets, subscribe to the United Catalyst Corporation daily e-newsletter, the 60-Second Report, click the link here. To learn more about recycling converters on assay or the United Ecosystem Bid Tool, you can also call an Account Executive at 864-824-2003 or email a specialist at [email protected]

Becky Berube has served the recycling community for over thirty years. Based in Greenville, South Carolina as President of United Catalyst Corporation, she writes a monthly educational column for the industry, and serves on several ARA and ReMa committees. She is a newly appointed Advisor on the US Industry Trade Advisory Committee on Critical Minerals. She was a recipient of a 2023 South Carolina Women in Business Award and is a mentor in the Women in PGMs program. Additionally, Becky serves as an At-Large Director of the ReMa Southeast Board, Co-Chair of the IPMI Preventing Auto Catalyst Theft Committee, and is on the Board of Directors of the International Precious Metals Institute (IPMI), where she is a past President.

PGMs & Converter Recycling 2024 – Where Do We Go from Here?

7 October 2024

Auto catalyst recycling has seen a substantial decline, with volumes down by approximately 30% or more from their peak in 2019. The trends in the auto catalyst recycling market and platinum group metal (PGM) prices are driven by a complex interplay of economic conditions, supply chain dynamics, industry-specific changes, speculative activities, and geopolitical risks. These factors are interconnected, with changes in one area often having cascading effects on others. Understanding these relationships is crucial for predicting future trends in PGM markets and the recycling industry.

 

What Happened?

 

Recycling Volumes Down.

Daniel Croft, Commodity Analyst, for UK-based metals consultancy, SFA (Oxford), stated that, “Platinum-group metals’ (PGMs) open-loop recycling is estimated to have grown from ~500 koz. in the mid-1990s and less than 1 moz. in 2000 to 4.21 moz. forecast for 2024 in 3E PGM terms. From 2000 to 2019, PGM recycling grew by an average of 9% p.a., peaking at just below 5 moz. just as the Coronavirus began to spread around the globe.”

Auto catalyst recycling volumes have declined by around 30% from their peak levels, mainly due to consumers holding onto vehicles longer amid economic uncertainty, which has reduced the availability of end-of-life vehicles (ELVs) for recycling. Additionally, the global semiconductor shortage disrupted automotive production, further limiting the flow of older vehicles to scrapyards. Lower PGM prices have also made recycling less economically viable, leading to decreased activity and hoarding of spent catalytic converters by recyclers.

 

PGM Prices Down.

Platinum peaked in 2008, at $2,200/toz., now down 58% to $900/toz.; Palladium peaked in 2020, at $3,000/toz., now down 68% to $950/toz; and Rhodium peaked in 2021, at $29,000/toz., now down 85% to $4,520/toz.

The factors affecting PGM prices are multifaceted. Global economic conditions, including inflation and rising interest rates, impact investor demand and the opportunity cost of holding PGMs. Supply chain disruptions, particularly in regions like South Africa and Russia, where PGM production is concentrated, can lead to supply constraints and price spikes. The automotive industry’s shift towards electric vehicles (EVs) and hybrids affects long-term PGM demand, though hybrid production still supports demand in the short term. Speculative trading in the futures market, especially in palladium, adds volatility, with large short positions creating the potential for short-covering rallies. Investment demand for PGMs as a hedge against economic uncertainty can also drive prices higher, while geopolitical risks, such as sanctions or political instability, further contribute to price fluctuations. Technological advancements in emissions control systems and government policies enforcing stricter emissions regulations also play crucial roles in shaping PGM demand and prices.

 

Market Trends and Future Outlook

 

Impact of COVID-19.

The pandemic caused a significant drop in vehicle production, which has yet to fully recover. This has affected both the supply of end-of-life vehicles for recycling and the demand for new vehicles with catalytic converters.

 

PGM Market Outlook.

The platinum market has shifted into a structural deficit due to flat primary supply, recovering demand, and lower recycling rates. Palladium and rhodium markets face similar supply challenges, with potential shortfalls expected in 2024.

Of note, in speaking with SFA (Oxford) they commented that, “As an observation, one area that everyone is getting blind-sided by is why do all forecasters have deficits and palladium prices aren’t rising. It is worth noting that supply is falling (lower recycling) and demand is falling, it’s just that supply has fallen faster than demand – although this isn’t a reason to bang the table and say prices should be higher even with a fundamental deficit. In an ideal situation for recyclers demand is rising and mine supply can’t keep up or we have a major disruption to supply, and prices go through the roof.”

For a more in-depth look at historical PGM prices, market balance, and world events see Figure 1.

 

 

Long-Term Recycling Growth.

Despite recent declines, recycling volumes are expected to grow in the long term as vehicles age and more are scrapped, with government policies potentially accelerating this process. SFA’s Croft goes on to say, “PGMs need cars, cars need PGMs.”

For a copy of SFA (Oxford) Platinum Standard, May 2024, or other publications, email them at [email protected].

 

For daily updates on the PGM markets, subscribe to the United Catalyst Corporation daily e-newsletter, the 60-Second Report, click the link here. To learn more about recycling converters on assay or the United Ecosystem Bid Tool, you can also call an Account Executive at 864-824-2003 or email a specialist at [email protected]

Becky Berube has served the recycling community for over thirty years. Based in Greenville, South Carolina as President of United Catalyst Corporation, she writes a monthly educational column for the industry, and serves on several ARA and ReMa committees. She is a newly appointed Advisor on the US Industry Trade Advisory Committee on Critical Minerals. She was a recipient of a 2023 South Carolina Women in Business Award and is a mentor in the Women in PGMs program. Additionally, Becky serves as an At-Large Director of the ReMa Southeast Board, Co-Chair of the IPMI Preventing Auto Catalyst Theft Committee, and is on the Board of Directors of the International Precious Metals Institute (IPMI), where she is a past President.

Economic News and the Outlook for PGMs and PGM Recycling

6 September 2024

At the time of writing, it is 92 days until the US Presidential Election, the Dow, S&P, and Nasdaq each tumbled roughly 3 percent in three days. Recession fears are mounting with lower-than-expected jobs added andmunemployment rising, the 10-year Treasury yield hits 3.716%, construction of new homes and existing home sales both declined, investors are selling off oil, crypto and tech stocks – the “Magnificent Seven” large cap tech stocks lost nearly $1 trillion in market capitalization; Warren Buffet’s Berkshire sold roughly half of its stake in Apple; Bitcoin lost $500 billion in market cap. The very next day, the market could recover nicely. The word of the day and maybe the word for the next few years is volatility.

 

As investors sell off riskier stocks, typically gold and other precious metals become haven investments. On Friday, August 2, gold reached an all-time high amidst hopes of a Fed rate cut and disappointing US job data, then gave up 2 percent on Monday, July 5, triggered by panic and sell off in the Japanese market. Platinum dropped 4.1 percent and palladium decreased by 4.5 percent to its lowest level since August 2018.

 

What does all this mean for the Platinum Group Metals (PGMs) and PGM recycling, the lion’s share of which comes from scrap catalytic converters?

 

The following articles help explain some of the key issues plaguing PGM supply, demand, and price and are worth the read.

 

In the World Platinum Investment Council (WPIC) June newsletter, Platinum Perspectives, Edward Sterck and team give a fantastic overview of the WPIC outlook is for platinum and palladium supply, demand, and price. WPIC’s latest palladium supply/demand forecast projects tightening deficits for 2024 and 2025, followed by surpluses from 2026 onwards. Contrary to received market wisdom, the surpluses are not the result of a rapid decline in ICE demand, which remains relatively flat (fig 3). Indeed, the projected transition to a surplus is entirely contingent on a significant increase to recycling (over 1.3 Moz p.a. by 2028, fig 1), but this outlook is predicated on a number of existing challenges being resolved. Any delays to solving these could slow the pace of the growth in recycling supply, resulting in deeper and more persistent deficits and further postpone the surplus. This would in turn feed into value expectations and provide upward support for the palladium price, especially in the context of any potential short-covering rallies (fig 2)

 

Of further note, Jake Lingeman of Newsweek, writes in an article titled, Today’s New Car Sales Part of a Great Recession-like Trend, Car sales have continued their climb over the last few months, according to J.D. Power and GlobalData. Prices are down while units moved are up both from April and from May of last year. The industry is producing more vehicles than it sells, which traditionally results in discounts later in the year, once models have sat on dealership lots for a few months. Thomas King, president of the data and analytics division at J.D. Power explained, The pricing story of the automotive industry in 2024 is a compelling economic case study. Year to date through May, average transaction prices have declined by nearly 3 percent compared to 2023. Such a decline is rare, with the last significant drop occurring during the Great Recession.

 

Traditionally, supply and demand fundamentals would dictate that market balances, deficits, and surpluses, would guide changes in PGM prices. The WPIC article and forecast show short to mid-term deficits for platinum and palladium in 2024 and 2025, leading to surpluses depending on recycling volumes for 2026 and beyond. Some analysts have predicted that the two-thirds primary supply of PGMs from mining and one-third secondary supply from recycling is set to flip in the coming years to two-thirds from recycling and one-third from mining.

 

Sibanye-Stillwater CEO, Neal Froneman, says the firm prepared to mothball the US mine, at the London Indaba conference in June, if there is no correction in the platinum and palladium price. David McKay writes in his June 10 article for MiningMx.

 

Froneman is one of the mining executives who believes the market fundamentals, namely the current deficit, will lead the prices to “pop.” But there seems to be a market disconnect as explained by various industry experts in McKay’s July 26, No sign of life yet in PGMs despite industry restructuring, Wilma Swarts, PGM research director for Metals Focus, a UK research consultancy firm, says there is greater evidence to support that mining production cuts in South Africa could be three times higher over the next five years than South African PGM miners have announced. It’s true that platinum is in a supply deficit; it is estimated by the World Platinum Investment Council to total 476,000 oz this year, compared with an 878,000 oz deficit in 2023. Palladium is also edging into deficit territory. But the market is not taking these figures on board as of yet. That’s because the traditional supply-demand drivers are less impactful than conventional wisdom suggests, says Nedbank Securities analyst Arnold van Graan.

 

Are the platinum and palladium market prices about to recover? Continue to soften? The outlook is mixed, and investors are encouraged to stay on the sidelines until there are some real indicators of recovery. Read the full article here.

 

It has been three years since the bubble in PGM prices began to deflate as McKay writes, we currently see mines restructuring, layoffs happening, one mine threatening to close, there have been disruptions in PGM recycling, auto manufacturers are still destocking PGM supplies, oversupplying automobiles, and auto prices declining. The US economic indicators are pointing to an economy that is rapidly slowing and heading into or has already been in a recession. And in the world of PGM prices, there are whispers of recovery amidst an extended period where fundamentals and spot prices are disconnected. All at a time when platinum and palladium are slipping into a structural deficit (2024 – 2025) which could theoretically help prices in the short to midterm while at the same time recycling volumes are predicted to double in the long term (2026 and beyond) keeping prices level or softer if demand remains flat or weakens.

 

The bright light in all of this for those involved in PGM recycling? The WPIC June newsletter states that Market sentiment has been particularly negative towards palladium due to a view that demand will fall away with rapid drivetrain electrification. In reality, however, the outlook for auto demand is proving resilient due to consumer reluctance to adopt full electrification and growth in demand for hybrid vehicles (10-15% higher PGM loadings versus the pure ICE equivalent).