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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.

To learn more, or to stay informed on these topics, you can subscribe to our daily e-newsletter or get Platinum Group Metal prices texted twice daily to your phone, TEXT “Daily” to 844-713-PGMs (7467). You can also call us or email us at [email protected].

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.

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.” The words of that song feel very true today with the platinum group metal (PGM) prices coming off the highs of 2021 and 2022 and the average converter price dropping by more than half. Many of you are holding converters. More than normal. More than ever. A dangerous strategy at a time when converter theft is at an all-time high. Over the weekend, one recycler had 10 gaylord boxes of converters stolen. The thieves entered the side of his metal building and were caught on video robbing the facility for over two hours between Saturday night and Sunday morning.

Where are the PGM prices going? If only we knew. In times like these, it’s easier to look back than forward. With a strong dollar, high inflation, recessionary pressure and supply disruptions in Russia and South Africa, a comparison can be drawn between today and the early 2000s. Between the end of 2000 and the beginning of 2002, Russia had a supply disruption and palladium spiked to $1,100 per ounce then dropped by over 60 percent when the production was restored. The Ford Motor Company stockpiled without hedging and lost over a billion dollars. Then in March of 2008, with supply disruptions from South Africa, platinum hit a record-high at the time of over $2,250 per ounce, a spot price more than twice that of gold. It subsequently fell to $774 per ounce in November. Within three years, the platinum price more than doubled to $1,887 per ounce. In 2008, rhodium touched $10,025 an ounce just before the global financial crisis hit, but the metal would drop 90% before the end of that tumultuous year. The price spike would lead to end users thrifting the metal and substituting palladium for rhodium going forward. It would be another 13 years before rhodium would spike again to nearly $30,000 an ounce.

This history lesson reminds me of what I was taught at my first job out of college at Putnam Investments in Boston. Mutual funds are a long-term investment. Think about a three to five to ten-year performance horizon. The same timeframe can be seen with movements in precious metal pricing. Spikes and rebound do not happen overnight. You can study the SFA (Oxford), Bloomberg charts that accompany this article to see the price drivers for each of the platinum group metals. (Updated September 2022) At Putnam, I also learned about dollar cost averaging a strategy to manage price risk when you are buying stocks, bonds, ETFs, and mutual funds. It involves investing the same amount of money in a target security at regular intervals over a certain period, regardless of price, to obtain the average buy price over time. I always think of this when it comes to selling scrap catalytic converters into the market. If you continue to sell converters as you purchase cars, regardless of price, you will obtain the average price for each metal year over year. You do not have to hold or fold. You can sell. And you can sell with a strategy. If you are stockpiling converters, sell the most recent load you have at today’s prices. If you work with a reputable processor, you can process your back log loads (minimum lots size required) and put the metal on account to be sold later. As we have mentioned in other articles, platinum is going to be a very important metal for the hydrogen economy and many analysts believe it may double or quadruple, surpassing palladium again, in the next three to five years. Rhodium is still key to reducing NOx, so as emission standards increase around the world, the use of rhodium will also increase.

To learn more, or to stay informed on these topics, you can subscribe to our daily e-newsletter or get Platinum Group Metal prices texted twice daily to your phone, TEXT “Daily” to 844-713-PGMs (7467). You can also call us or email us at [email protected].

This can be a confusing business on many levels. Do you sell your converters by the piece for a “fair market value?” Do you sell them on assay or precious metals recovery for the “intrinsic” value less processing and refining charges? Whom are you selling to exactly? What is the difference between converter recycling companies? Who is doing the actual refining?

Let us shed some light on this issue by starting with some simple definitions and a graphic.

Recycler: A professional automotive dismantler that recycles end-of-life vehicles. (10,000s)

Collector: An individual or company that buys and sells scrap catalytic converters or any core commodity. (100s)

Processor: A professional company that de-cans, mills, samples, and assays or tests scrap catalytic converters and that can determine the precious metal value of the spent automotive catalyst. (Two dozen professionals; with sample prep, fire assay, and ICP laboratories, less than 10)

Smelter: A company that transforms the spent automotive catalyst into a collector metal by heating and melting and then sends it on for final refining. (Less than a dozen smelters and refiners worldwide)

Refiner: A company that reduces the collector metal down to the pure form of Platinum, Palladium, and Rhodium by chemical dissolution. (Less than a dozen smelters and refiners worldwide)

A few of the smelters are mining companies. Most of the refiners are global material science and chemical companies that make catalysts and other technological materials. Pro tip: If a facility lacks pyro- and hydro-metallurgical processes, it is likely not a smelter or refiner.

Getting the Most from Your Converters with a Process You Can Trust

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. The trick to selling on assay is fourfold: Knowing the actual count including halves so that you can know your true average. Mass balancing all weights including shipping materials, scrap, catalyst, and dust. Scientifically accurate sampling collection to produce the sample of record from the refiner or a third-party lab. Verified assay results from the end refiner or third-party lab. Make sure you get paid on the “official assay of record” and make sure the assay results can be verified by a third party. Without one of these four aspects being true and accurate, you are sure to be leaving money on the table even when selling on assay, never mind when selling by the piece or on auction or with an app.

As a road course race driver, instructor, and high-performance driving coach, I have had the opportunity to work with all types of drivers at various talent levels. Over the years, I have learned many of the same lessons from the racetrack that can be applied to an automotive recycler getting the most for recycling scrap catalytic converters. Specifically, lessons learned about preparation, knowing critical details, focus, and keeping your eyes up.

The drivers that visit the victory lane often know the car and equipment need to be exhaustively prepared. The driver knows they must be physically and mentally focused on enduring the challenges of racing. If the level of preparation is off by even a tiny percentage, the desired results will not be there. Race drivers watch videos, review data, practice on simulators, and drive the track mentally over and over. That is just part of preparing the driver.

As a business leader, before you go into an important meeting—such as leading your entire team or a discussion with a customer, you need to think clearly about the outcome you want and the details of making that happen. Every detail must be correct every time. Your preparation to get the most for your converters should include asking these questions: Are you in control of your converter sales, or are you at the mercy of your buyer? How much insight do you have into the actual value of your scrap catalytic converters? Do you sell your units by the piece for a “fair market value,” or are you selling on recovery?

Do you understand the details of different methods for recycling converters and how they affect your bottom line?  There are many ways to sell converters. Let us go over a few basic methods.

Selling by the piece: The most common way of selling scrap catalytic converters. Units are commonly sold to peddlers, collectors, core companies, and some processors for a “fair market value.” The problem with this method is the subjectivity of the prices. Price lists may be based more on the competitive landscape of one’s region than on the intrinsic precious metals value. Converters that are purchased this way are often easily upgraded and downgraded to “make the sale.”

Selling by auction or collective bid: In recent years, many recyclers have found some peace of mind and increased profits in selling through an auction or bidding process. The theory is that the sale goes to the highest bidder, and you receive the “best” price. The downside to this method is that the buyer will most likely turn those converters around and sell them on recovery or assay, which means you most likely left money or margin on the table.

Selling on assay: In the past 10 -12 years, selling on recovery of the precious metals or assay has been the method that we have promoted. In the end, it is the only way to determine the actual value of the scrap catalytic converters being sold. With assay-based selling, you commonly sell to a professional processor or smelter.

What is your company’s corner two turns ahead? A new piece of technology? New business metric? Launch an expansion?  Maximizing your catalytic converter profitability?

Keep your eyes up—Put in place mechanisms to help your team attack the corner. Don’t drive in the mirror.  While you are aware of what is behind you, you are working towards the future. Focusing too much on the past will only distract you and slow you down. Shift your attention forward to the place you want your organization to be.

As a business leader or race driver, if you do not apply lessons from your experiences, your growth will be limited.   “In racing, there are always things you can learn every single day. There is always space for improvement, and I think that applies to everything in life.” — Lewis Hamilton, Formula One World Champion.

If you have questions about this article or anything pertaining to the recovery of precious metals and materials from automotive recycling, we, at United Catalyst Corporation, are here to help you. United Catalyst Corporation is a processor of scrap catalytic converters offering global refining services. Our recycling solutions are accurate, scientific, and verifiable to ensure the highest earnings. United Catalyst is a processor you can trust.  To subscribe to our daily newsletter or get Platinum Group Metal prices texted twice daily to your phone, TEXT 60-Second or Daily to 864-834-2003. You can also call or email us at [email protected].

Will the world’s governments and automakers meet their climate-control-driven mandates to discontinue sales of diesel and gasoline cars in favor of zero emission vehicles by 2030? And what does the electrification movement mean for the supply and demand of precious metals predominantly used in automotive catalyst to control emissions?

The “Group of Seven (G7) nations backed away from plans to set a target for making sure most new cars sold are greener vehicles, instead pledging only to speed up efforts to move away from combustion engines,” reported Automotive News on June 14.  This language was a move away from earlier communication drafts that spoke of “ensuring” that most car sales would be zero emission by 2030.

In the short-term, for the next 10 – 15 years, expect to see an increase in the demand for platinum group metals or PGMs for several reasons. As emission standards increase across the globe so do the PGM loadings in converters. The real-world driving emissions (RDE) test which measures specific pollutants such as NOx emissions requires higher loadings of rhodium (Rh), the superior metal application.  Analysts and consultants suggest as much a 20% higher. Hybrids and plug-in hybrid electric vehicles (PHEVs) also require 5-10% more PGMs due to frequent engine cold starts. As the world makes the move toward electrification with hybrids leading to fully electric and then fuel cell-powered vehicles, auto catalyst producers are set to swap out the more predominant palladium (Pd) for platinum (Pt) and rhodium (Rh) in the coming years.

With more precious metals being used in converters and an average vehicle age of 20 at the time of scrappage, the supply of recycled PGMs especially Pd is expected to increase from 5 million ounces (MOZ) to 7 MOZ. by its peak in 2031-2032. As mobility trends toward fuel cell electric which uses more platinum in the storage of hydrogen energy, it is the long-term demand for palladium that is in question. If zero emission mandates are adopted to allow for only fully electric vehicles, plug-in hybrids (PHEVs) and hybrid electric vehicles (HEVs) will be eliminated along with ICE vehicles. Palladium demand will be seriously hampered. Consultant, Matt Watson, of Precious Metals Commodity Management, LLC, suggests that “Palladium will push from structural deficit to structural surplus without new demand source(s). It is not a question of if, it is a question of when.”

Outlook for automotive recyclers and auto catalyst recycling:

Over the next 15 to 20 years as vehicles come off the road, the supply of palladium from scrap catalytic converters is set to increase, while the supply of platinum decreases. At the same time, the opposite will happen to demand; platinum demand will increase as palladium demand decreases, unless alternative uses for palladium are found. In the short term, PGM prices are well supported at current, if not, higher levels.

In the short term, expect price volatility. Standard rules do not apply. Precious metals are considered a safe haven investment since they earn no interest, often a safety net when markets decline, or a hedge against inflation. With demand factors like semi-conductor chip shortages and increased use of PGMs in catalyst loadings, the technical rules may not apply. The moral of this story is, if you are recycling scrap catalytic converters on assay, and participating in the sale of your precious metals, stay hedged.

Are you in control of your converter sales? Or are you at the mercy of your buyer? How much insight do you have into the actual value of your scrap catalytic converters? Do you sell your units by-the-piece for a “fair market value” or are you selling on recovery by a process called assay? We hope you are selling on assay with a reputable processor.

Recycling converters on assay is a journey. We want to help you with that journey. There is power and profit in your converter education. With so many ways to sell converters, let us go over a few of the basic methods and then go a little deeper into understanding assay.

Selling by-the-piece: The most common way of selling scrap catalytic converters. Units are commonly sold to peddlers, collectors, core companies, and some processors for a “fair market value.” The problem with this method is the subjectivity of the prices. Price lists may be based more on the competitive landscape of one’s region than they are the intrinsic precious metals value. Converters that are purchased this way are often easily upgraded and downgraded to “make the sale.”

Selling by auction or collective bid: In recent years, many recyclers have found some peace of mind, and increased profits, in selling through an auction or bidding process. The theory is that the sale goes to the highest bidder, and you receive the “best” price. The downside to this method is that the buyer will most likely turn those converters around and sell them on recovery or assay which means you most likely left money or margin on the table.

Selling on assay: In the past 10 -12 years, selling on recovery of the precious metals or assay has been the method that we have promoted. In the end, it is the only way to determine the true value of the scrap catalytic converters being sold. With assay-based selling, you commonly sell to a professional processor or smelter.

A processor is a company that de-cans, mills, samples, and assays or tests scrap catalytic converters and that can determine the precious metal value of the spent automotive catalyst. There are approximately two dozen professional processors in North America; those with sample prep, fire assay, and ICP laboratories, there are less than 10. A smelter is a company that transforms the spent automotive catalyst into a collector metal by heating and melting and then sends it on for final refining. An end-refiner is a company that reduces the collector metal down to the pure form of Platinum, Palladium, and Rhodium by fire assay and chemical dissolution and analysis. There are less than a dozen smelters and refiners world-wide.  A few of the smelters are mining companies. Most of the refiners are global material science and chemical companies that make catalyst and other technology materials. The photo below shows the complexity of the smelting and refining process. Pro tip: If a facility lacks pyro- and hydro-metallurgical processes, it is likely not a smelter or refiner.

Getting the Most from Your Converters with a Process You Can Trust

Are You in the Driver’s Seat of Your Converter Sales?

Are you selling converters or precious metals? 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. Ask yourself: Who has my money? Am I getting the most from these converters with a process I trust and can verify?

Are you getting the most from your converters? To get the most from your converters there are a few things you need to verify:

1. An actual converter count including halves so that you can know your true average.
2. A reconciliation of the total weight of your load including shipping materials, scrap, catalyst, and dust to ensure no losses.
3. A scientifically accurate sample from the end-refiner or an approved third-party lab as the basis for your payment.
4. A verified assay result from the end-refiner or an approved third-party lab as the basis of your settlement.
5. The highest metal prices for the sale of your metal.

Without one of these five aspects being true and accurate, you are sure to be leaving money on the table even when selling on assay, never mind when selling by the piece or on auction or with an app.

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. The trick to selling on assay is fourfold: Knowing the actual count including halves so that you can know your true average. Mass balancing all weights including shipping materials, scrap, catalyst, and dust. Scientifically accurate sampling collection to produce the sample of record from the refiner or a third-party lab. Verified assay results from the end refiner or third-party lab. Make sure you get paid on the “official assay of record” and make sure the assay results can be verified by a third party. Without one of these four aspects being true and accurate, you are sure to be leaving money on the table even when selling on assay, never mind when selling by the piece or on auction or with an app.

It is hard to imagine our lives without high-tech devices.  Everything we touch or drive seems to have an electronic brain.  Just try to order a new vehicle during the semiconductor chip shortage.  Roughly 60,000 to 70,000 unfinished vehicles sit in storage lots around assembly plants waiting for chips and related components.

What exactly does this have to do with automotive recycling?  Critical minerals and metals power High-tech devices.  The automobile is the largest secondary source of the critical technology minerals and metals needed today, followed by electronics and appliances.

Semiconductors are an essential component of electronic devices, enabling advances in communications, computing, healthcare, military systems, transportation, clean energy, and countless other applications.  The U.S. has an abundant supply of minerals and metals—like gold, copper, molybdenum, silver, and uranium—essential for the technology industry.  Additionally, are the critical metals: rare earths (REE), platinum group elements, niobium, tantalum, indium, tungsten, lithium.

How rare are rare earth elements?  A common misconception is that rare earth elements are rare.  The truth is that the most common rare earth elements, like copper and lead, are found on every continent, on the ocean floor, and in almost all the technologies we use today.

Does China control the supply of rare earth elements?  In the late 1970s to mid-1990s, China increased the annual production of rare earths and flooded the marketplace, which dramatically dropped the prices of REEs.  More recently, China bought a controlling interest in rare earth mines in the US and Australia.  Therefore, many say that China controls the supply of rare earth elements.

Where on the vehicle are the critical minerals and metals found?  The platinum group and rare earth elements are found throughout the vehicle in catalytic converters, electronic control modules or car brains, magnets of all sorts, and electric vehicle batteries.

In the fall of 2021, at the 78th Annual ARA Convention & Expo, in Dallas, TX, we assembled an expert panel to discuss what “electrification” will mean for automotive recycling.  Dirk Spiers, Founder of Spiers New Technologies, and Lea Malloy, Head of EV Battery Solutions of Cox Automotive Mobility, now partners, provided an update on what they hope to be a “one-stop” solution for battery life cycle management to include both reuse and recycle.  Matt Watson, Director of Precious Metals Commodity Management LLC, presented research on energy trends and the heightened critical mineral demands of the future.  Watson told the audience that copper and silver drive the electrification of everything and will be in high order.  Silver is the best conductor of energy, with copper a close second, gold and expensive third, and aluminum a distant 4th.  He stated that 560 metric tons of copper had been mined in the past 1,000 years.  We will need double that amount for the next 30 years for clean energy and the electrification of everything.

Companies like United Catalyst Corporation are helping recyclers with profitable recycling programs for mineral-rich parts, namely catalytic converters, automotive electronics, harness wire, and EV batteries.  Programs that take catalytic converters from a used part to precious metal to be sold on the open market.  Programs allow recyclers to sell gold, silver, copper, and aluminum from other valuable vehicle scrap.  And soon, programs that help direct recyclers in selling EV batteries.  Remanufacturing and reuse, as a rule, tend to be more profitable than recycling.  A decision tree forms depending on the battery’s chemistry, the state of charge, and logistics.

The bottom line is that it is a great time to be in recycling.  These critical technology metals will be in demand, and auto recyclers will have a continuous supply.  The prices for these metals are likely to climb over the long term.  Since recycling has a lower carbon footprint than mining, many OEMs get higher credits for using recycled ounces than mined ounces.  This is more good news for auto recyclers.

If you have questions about this article or any issue pertaining to the recovery of precious metals and materials from automotive recycling, we at United Catalyst are here to help you.  United Catalyst Corporation is a processor of scrap catalytic converters that offer global refining services.  Our recycling solutions are accurate, scientific, and verifiable to get you the most money.  United Catalyst is a processor you can trust.

To subscribe to our daily e-newsletter or get Platinum Group Metal prices texted twice daily to your phone, TEXT DAILY to 864-834-2003.  You can also email us at [email protected].

United Catalyst Corporation is a North American-based processor of scrap catalytic converters that offer global refining services.  Getting you the most from your converters with a process you can trust.  We feel that an educated customer is our best customer.  We know this industry can be hard to navigate, but we have some expert tips to help you through the process of converter recycling.

#1 Tip: Always follow The Four P’s of converter recycling profitability.  You need a process, a program, and a partner you can trust.  You also need to learn the power of Education.

#2 Tip: A Process You Can Trust – You can sell on assay instead of selling by the piece.  You will need to be paid on a sample and assay that are official, accurate, and verifiable.

#3 Tip: A Program You Can Trust – You need to get money when you need it to run your business.  Getting you the most money from your converters should not mean you have to wait three months to get paid or until you have a truckload.  With most processors, you have payment choices.

#4 Tip: A Partner You Can Trust – Selling on assay or recovery helps eliminate grading scams and two-for-one sales because there is a test result that can be considered the basis for the sale.  However, even with this method, nothing is guaranteed.  Working with a partner you can trust cannot be overstated.

# 5 Tip: The Power of Education – We take a complex process and try to make it understandable and easy to use.  You will increase your profits once you learn about your converters and your yard profile.  No one will ever be able to take advantage of you again.

#6 Tip: Focus on the Numbers – We strongly advise our customers to know their count before selling.  If you do not have an accurate unit count, you will not know your actual average.

#7 Tip: Understand the Importance of Weights – Next to knowing your unit count, weights are the second most important piece of information.  Be sure your processor is mass balancing all weights IN and OUT of their facility.  If you are missing weight, you are missing money.

#8 Tip: 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.

#9 Tip: One Way.  Assay. – Assay-based selling with a process, a program, and a partner you can trust (and verify) is the only way to maximize the money you get for your cats with any certainty.  There is more than one good way to do most things in life.  This is not true with converter recycling.

#10 Tip: Play the Long Game – Keep selling into the market on assay.  Do not take unnecessary risks.  Play the long game.

#11 Tip: Increase Your Averages – By switching to Assay, your average cat sale should be up anywhere from 5-45%, depending on how your buyer was treating you.

#12 Tip: Be Meticulous – Be meticulous about safeguarding your converters: locks, video, counts, personnel.  Even if it takes a significant amount of time and money, do whatever it takes.  The primary responsibility lies with you.

#13 Tip: Never tell your buyer, You Know Where They Are – If you are selling by the piece, never say to the converter company, “you know where they are.” This is a license to steal.

#14 Tip: Mark Your Cats – Another way to safeguard against theft is knowing your count and secretly marking your cats.  If your cat count is consistently short when you sell, start marking them in an unknown way.  Pick a color each week or month and spray inside the cat.  If someone takes your converter and tries to come back and sell it to you, you have got them.

#15 Tip: Put Your Halves Aside – If you are selling by the piece, never let the company put the halves on the truck until you inspect them.  If a converter is worth $300 and it’s three-quarters full, why would you take half price when the guy sells it as a full?

#16 Tip: Do Business with Good People – Good people need to do business with good people.  Screen your clients and customers.  Know your customer (KYC) is a legal requirement to comply with Anti-Money Laundering laws (AML).  Protect yourself and your business.

#17 Tip: Become an Educated Customer – The best recyclers know their numbers in converter recycling and partner with companies that educate.

#18 Tip: Audit your program – Become a data junkie.  Learn all the key metrics to avoid misleading data, like your average converter price, and track actual sales.  As you gain data points, you will be amazed at how easy it is to get misled.

#19 Tip: Switch to Assay – There is only one way to recycle a scrap catalytic converter.  It must be de-canned, milled, sampled, assayed, smelted, and refined.

#20 Tip: Get All the Money for Your Converters – How much money do you want from your converters?  Your answer should be all of it.  How do you get all the money from your converters?  Process and sell them on assay.

If you have questions about this article or any issue pertaining to catalytic converter recycling, our team is here to assist you.  Recycling converters on assay is a journey.  We hope you will rely on us at United Catalyst as your guide.  To subscribe to our daily e-newsletter or get Platinum Group Metal prices texted twice daily to your phone, TEXT Daily to 864-834-2003.  You can also call us or email us at [email protected].

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.

At our company, United Catalyst Corporation, we have a moto: Getting the Most from Your Converters with A Process You Can Trust.  It is as simple as four Ps; a Process you can trust, a Program you can trust, a Partner you can trust, and the Power of education.

A Process You Can Trust

How much money do you want from your converters?  Your answer should be all of it.  Did you know there is only one way to get all the value from a converter, and that is by destroying it: de-can, mill, sample, assay, smelt, and extract or refine the platinum, palladium, and rhodium out of the catalyst?  The way to get all the value from the converter is to sell it on this Process called assay-based selling.  An assay is a test result from a sample that, if done correctly, yields the highest result.

A Program You Can Trust

An assay-based selling Program benefits you, the recycler, if: 1.  The test results are true and accurate of the converters you sent in.  2.  If the recycling costs are reasonable and customary  3.  If the metals are sold at a fair market price.   When you sell converters based on this Process and a fair Program, you get the actual value of each scrap catalytic converter regardless of wear and tear on the unit or grading category.  In this Program, it doesn’t matter what car the converter came from or how many miles the vehicle had; whatever precious metal contained in that converter will be recovered and paid on.

A Partner You Can Trust

In an industry that has historically been rife with smoke and mirrors, as recyclers looking to get the most from your converters, you need a Process you can trust, a Program you can trust, and a Partner you can trust.  You see, you can do everything right.  You can sell on assay instead of selling by the piece.  You can have excellent terms and pricing.  But if you do not have a reputable partner that you can trust, you could still lose.  President Ronald Reagan, on multiple occasions, used the Russian proverb, Trust but verify, in the context of nuclear disarmament.  The same holds true in our part of the recycling industry.   Selling scrap catalytic converters has always been a risky business.  Taking a price on something where the value is unknown screams “seller beware.” Selling on assay or recovery helps eliminate that problem because there is a test result that can be considered the basis for the sale.  However, even with this method, several things can still go wrong for the recycler: settling on an inaccurate or manipulated sample and/or assay result; losing weight during processing and refining; having too much trash and/or moisture; paying exorbitant recycling costs, and selling metal that is too heavily discounted.  For all these reasons, the importance of working with a Partner you can trust cannot be overstated.  The bottom line is that you need to be paid on a sample and assay that are official, accurate, and verifiable.

The Power of Education

At United Catalyst Corporation, we believe that an educated recycler is our best customer.  We give recyclers an education in auto catalyst processing and precious metals refining.  We take a complex process and make it understandable and easy to use.  We know that once a recycler learns about their converters and their yard profile, they will increase their profits, and no one will ever be able to take advantage of them again.   To learn more about selling converters on assay please email us at [email protected] or call us at 864-834-2003.