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UCC Article Archive – 2019 – Becky Berube

Palladium has been on a historical run the past two months to as high as $1553 toz. 

But why don’t we receive the published bid or spot price for metal that we are selling today? 

Two Reasons for A Metal Price Spread 

Bullion vs. Sponge 

When precious metal is refined from catalyst it is not returned to the market as bullion, but rather it is returned as industrial grade metal, or sponge. It actually looks like dirt. You will see a small discount from the published bid price depending on supply and demand for each metal. Typically, the shorter the supply of a metal against demand, the higher the discount or spread.  

Physical Delivery and Lease Rates 

In December 2018, lease rates for Palladium spiked to 22%. But what does this have to do with the price you receive for selling palladium? The short answer. The borrower is the lender’s slave. 

When metal has been leased (or borrowed) and it is in short supply, the lease rate is increased. With a high demand for Palladium and a shortage of nearly 1 M toz., the lease rates are astronomical. 

Refiners use leasing as a tool or strategy for their business. But when lease rates are higher than normal, that cost is passed on to the market. 

As recyclers, when you hedge or sell metal before the metal is due or becomes physical metal, you take a discounted price from spot. A 30-, 60-, or 90 day price. Today the discount for Palladium between a 90-day contract and spot is $45. 

If you hedge today and metal becomes physical in June, or in 90 days, you take a 90-day future contract price.Today that would be $40-$50 less than the published bid price.Platinum and Rhodium are in surplus, so currently the lease rate spread for Pt and Rh are nominal or flat. There is roughly no difference between a 30-, 60-, or 90-day or spot price. 

Precious Metals Leasing Explained 

Leasing is a tool used by most players in the precious metals market for a variety of reasons. My friend, Miguel Perez-Santalla, Head of Trading Sales and Marketing, Heraeus Metals New York, wrote an excellent and rather exhaustive article back in 2013 on Precious Metals Leasing in which he states the following. 

“Leasing is an integral part of the precious metals market. Why is it necessary? For a diverse number of reasons, the first is the need for industry to borrow instead of buying outright the metal. This enables them to avoid owning the metal at a fixed price if they have not yet contracted to sell their product. 

Other companies want to borrow rather than buy gold or silver, to keep their cash consumption down. Leasing gives their business greater flexibility in money management. Still others choose to borrow to free up cash. Finally, there are those in a bridge lease, commonly used in the oil refining and pharmaceutical fields.” 

To read the full article, it can be found in the June 5, 2013, online article in Resource Investor, entitled, “Precious metals leasing explained…What is precious metals leasing, and why is it done…?” 

What is the implication for selling scrap catalytic converters?  

When you sell scrap catalytic converters you are selling precious metals. At United Catalyst Corporation we believe that recyclers can get the most from their converters with the scientific process of selling converters on assay.  

The point of this article is that when you hedge (lock in a metal price) or sell metal from your scrap catalytic converters there is a metal price spread between the price you see published on the internet and the price you receive. For delivering industrial grade precious metals, you can expect a modest discount; but for selling precious metals that are in high demand and short supply, the metal price spread can be significant.  

UCC Article Archive – 2019 – Becky Berube 

For nearly thirty years the automotive industry has been talking about hybrid electric vehicles and fuel cells without producing a very large market to date. Emission standards across the globe are becoming increasingly stricter. What does this mean for converter, hybrid battery, and fuel cell recycling? 

The Future is More Complex 

The tightening emission standards means several things: increased number of three-way catalyst (TWC) per vehicle but also an increased number of different types of catalyst per vehicle; some with little or no precious metals. Pictured here.

Recyclers are already becoming aware of the complexity of the large diesel systems that look like rockets where the diesel oxidation catalyst (DOC) has a typical amount of platinum and palladium (Pt/Pd)  and no rhodium (Rh) but the diesel particulate filter (DPF) contains only a small amount of Pt/Pd. The diesel system system also contains  a selective catalytic reduction (SCR) catalyst which is mostly free of precious metals and a lean nox  trap (LNT) which also contains very little precious metals. These systems require separation for recycling and have higher recycling times and costs when containing silcon carbide (SiC).  

Recyclers can expect more complex exhaust systems on both gasoline and diesel fueled vehicles. Overall, this trend implies more demand and use of precious metals but also more knowledge for proper recycling through an expert processor on a recovery basis, or assay,  to get full value. 

What will the alternative powertrains mean for recycling and the demand for platinum group metals (PGMs)? 

Hybrid Electric Vehicles (HEV) 

Johnson Matthey predicts that the longer battery range and the possibility of “cold starts” at high speeds could mean up to fifteen percent higher PGM loadings in the catalyst. This market is expected to grow from 2 million to nearly 20 million by 2025 including 48V electric system, mild hybrid electric vehicles (MHEV).  

Recyclers can already expect to see these MHEV models in everthing from Chevy Silverado Hybrids (2005-2007) to Chevy Malibu and Saturn Vue and Aura hybrid models (2007 – 2009) to Buick, Audi, Chevy, Honda, Kia, Hyundai, Jeep, and Mercedes hybrid models (2017 -) to  the new Mazda 3 and Range Rover Evoque (2019 -).  

The result will be that these catalytic converters will contain higher loading of PGMs and therfore be more valuable.  

Hybrid Battery Recycling and Reuse 

The proper handling and disposal of the lithium ion (Li-ion) and nickel metal hydride (NiMH) batteries is an entirely separate issue. 

Unlike lead acid batteries, the commercial model for recycling is not nearly as viable. Although global refiner Umicore has developed a process for recycling these Li-ion, NiMH batteries, the cost of recycling exceeds the value returned. In this case, reyclers that want a revenue stream from hybrid batteries will need to find a “second life” or resuse for them.  

Battery Electric Vehicles (BEV) 

Johnson Matthey also predicts that the battery electric vehicle market will grow from less than .5 million to nearly 6 million vehicles by 2025. BEVs use a combination of battery materials: Vehicle batteries are usually a secondary (rechargeable) battery. Rechargeable batteries used in electric vehicles include lead–acid (“flooded”, deep-cycle, and VRLA), NiCd, nickel–metal hydride (NiMH), lithium-ion (Li-ion), Li-ion polymer, and, less commonly, zinc–air and molten-salt batteries.  

Again, the mixed chemistry implies various handling techniques and recycling methods. In terms of value from PGMs, there is none. The fully electric vehicle has no impact on PGMs because without an internal combustion engine (ICE) the vehicle contains no catalytic converter.  

The Move Toward a Hydrogen-Oriented Economy 

In the next twenty years you can expect to see an infrastructure that fully supports hydrogen gas production, storage, transportation and consumption in power generation, transportation, industrial energy and building heat and power. In these days, the future is merging with the present and the supply chain is developing rapidly. By 2040, you should expect a competitively priced fuel cell vehicle. 

The Great Hope for Platinum: Fuel Cell Vehicles  

If you follow the markets, you know that the price of palladium (Pd) exceeded the price of platinum (Pt)  for the first time in the fall of 2017. The use of Pt in auto catalyst has been on the decline for the past ten years. The Pt market is in surplus and the demand is low, hence the lower price. Today we see recoveries of Pd in scrap catalytic converters that are three to four times the amount of Pt per converter.  

If the experts are right about the move from a fossil fuel-based economy to a hydogen-oriented economy, they predict that alternative powertrains and stationary power generators may be the last great hope for platinum (Pt) demand and use.  

Platinum (Pt) is the standard metal used in fuel cell technology because it can convert hydrogen into protons and electrons and it can break oxygen bonds and eventually form water.  

In conclusion, some experts say that the combination of hydrogen fuel cell hybrid, battery electric, and hybrid electric vehicle market share could go from 1 million to 50 million vehicles sold in the next twenty years. If this happens, watch for the increase of demand for Pt and get ready to start recycling more converters, hybrid batteries, and fuel cells.   

UCC Article Archive – 2019 – Becky Berube 

Even as steel continues to dip another 3.4% over the last two weeks or 27% since peaking in late March, scrap catalytic converter values continue to rise with the strength of the Platinum Group Metals (PGMs). Palladium itself up over $200 since last month rising for a fifth straight week as of the writing of this article, July 10. Industrial demand is strong especially in Asia as it increases the use of PGMs in auto catalyst to meet the China 6 emissions requirements. Investor sentiment is positive.  

Don’t Become an Easy Target 

When steel prices are low, it affects every recycler. It affects the bottom line, but it also affects the psyche. Low steel prices make you think twice about buying more cars. It also makes you think about selling more products for cash. Beware. Your need for cash also makes you an easy target for being taken advantage of. When converter values are high, and companies know you need cash, it is a good time for your margins to go down and theirs to go up. Offering you a high price across the board ($90 – $100 / unit) may look attractive at the time you need the money, but what if you are leaving too much on the table (another $10 – $15 / unit)? 

Get All the Money from 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? Sell them on Assay or recovery (An assay is a test result from a sample that, if done correctly, yields the highest result.) The amount of money you can get from an early payment is likely equal to the amount your being offered to sell them out the door for cash. The balance or final payment is the amount you could be giving up by selling them for cash or for an across-the-board price. With processing and refining companies like ours, United Catalyst Corporation, you can get an early payment within the first week of arrival and the balance within 30 – 45 days.  

A Revenue Stream that Keeps You Going 

In good times or bad, converter revenue is a source of income you can depend on. Even with PGM prices fluctuating, you can keep selling product into the market and take advantage of dollar-cost-averaging. There is no need to speculate (or gamble) on the metal prices. Just sell, sell, sell. If done with a reputable company, you will find you sold throughout the year at the average price for all three metals (Platinum, Palladium, and Rhodium) that year.  

Today Almost Anyone Can Sell Converters on Assay 

It used to be that to work with a converter processor on refining terms, you needed to have huge volumes. Today, thanks to the work companies like United Catalyst Corporation and others are doing, processing and refining is becoming more accessible to individual automotive and scrap metal recycling companies regardless of their size and converter volume.  We believe every recycler should be entitled to get the most from their converters. Ask companies what the minimum lot size is to sell on assay. At United Catalyst Corporation it is 100 converters. And your assay is from your lot of converters. The sample is properly collected, tested, and never co-mingled with another recycler’s converter lot sample.  

The 4 P’s of Converter Recycling Profitability 

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, a Program, and a Partner you can trust, and you need to learn the Power of Education.  

• A Process. 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.
• A Program. You need to be able to get money when you need it to run your business. Getting you the most money from your converters shouldn’t mean you have to wait until you have a truckload or can hold out for 3 months to get paid. If you can afford to do this, you may pick up a point or two more.  
• A Partner. 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 to 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: 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 Power of Education. At United Catalyst Corporation we believe that an educated recycler is our best customer. In fact, we give you an education in auto catalyst processing and precious metals refining. We take a complex process and try to make it understandable and easy to use. We know that once you learn about your converters and your yard profile, you will increase your profits, and no one will ever be able to take advantage of you again.  

UCC Article Archive – 2019 – Becky Berube

Corruption. Bribery. Fraud. Money laundering. Illegal financing or activities (e.g., funding terrorism). Companies of all sizes and in all industries, including automotive recycling, can benefit from knowing your customer or client and avoid working with untrustworthy or illegal companies.  

Every article I write is committed to educating you so that you can never be taken advantage of when it comes to selling scrap catalytic converters. That includes being a victim legally as well as financially. 

In recent years, authorities in the US and abroad have increased their focus on modernizing and enforcing anti-money laundering and terrorism financing (AML) regulations. As part of these efforts, the US’s Financial Crimes Enforcement Network (FinCEN) proposed Know Your Customer (KYC) requirements in 2014, which became law in 2016. 

KYC procedures are critical to helping you analyze and monitor risky customers. And, KYC is a legal requirement to comply with anti-money laundering (AML) laws. 

Why Who You Sell to Is So Important? 

Recently a very reputable recycler said to me, “Good people need to do business with good people.” This is true, but sometimes you don’t know if a company is “good people” and oftentimes you don’t think to check if a company is “good people” until something goes wrong.  

Unfortunately, in auto catalyst recycling, many unethical and criminal scandals abound. Converters get altered and sold under the guise of being more valuable than they are; full truckloads of scrap catalytic converters get paid for and never delivered; the money used to pay you for your converters can be money that is being “laundered.” 

Act before you are a victim or become part of an audit or investigation.  

Create a Know Your Customer (KYC) Process 

Each company is different, but the KYC process has similarities. Are you ready to Know Your Customer?  

 Step #1: Have Customers Fill Out a KYC Form 

When you are considering working with a potential company, be upfront about your KYC policy. Say that you are interested in being compliant with AML laws and must work with reputable companies to protect yourself and your company from any implication.  

First, you need to establish the identity of your customer by having them fill out the following information on a KYC Form either in paper or electronically to begin assessing the risk:  

• Title (e.g., owner) 

• Address 

• Phone number 

• Email address 

• Federal Employer Identification Number (FEIN) or Social Security Number 

• Proof of identity (e.g., passport, driver’s license) 

• Signature 

• Date 

Step #2: Develop a Customer Identification Program (CIP) 

To start your KYC procedure and remain compliant, develop a Customer Identification Program. 

In your CIP, outline how you will verify customers’ identities. Include what information you will ask potential customers for and how you will go about verifying the information provided. 

Consider also including how you will notify customers about your KYC policy and identity verification procedure. 

Step #3: Look at Customer Due Diligence (CDD) 

Customer Due Diligence is an important element in managing risks and protecting you and your business. With CDD, you must identify and understand your customers’ activities. Then, you can use the information you find to assess how risky they are to your business. 

Given the consequences of non-compliance (evidenced by unprecedented AML-related penalties levied against the industry in the past few years including jail time), companies should begin their implementation efforts as soon as possible, based on the proposed requirements and industry best practices. 

The most important part of due diligence is to establish the ownership and activities of the companies you sell to. 

While FinCEN’s proposal does not specify risk factors that must be considered in assessing a customer-entity’s AML risk, companies should at a minimum consider the following questions: 

• How complex is the customer’s ownership structure? Anyone with more than 10% ownership should be recorded. 

• Is the customer operating in a heavily regulated industry? No? This is high risk. 

• Is the customer’s home jurisdiction (or any of its neighboring jurisdictions) subject to sanctions, or home to terrorist organizations? 

• Do the customer’s home jurisdiction lack effective AML regulations or have high levels of corruption?  

• To what extent is the customer’s business cash-based? This is particularly high risk. 

• Has the customer taken any measures to mask the identity of its shareholders (e.g., via nominee shareholders or bearer shares)?  

• Is the institution’s relationship with the customer face-to-face? 

Step #4: Continue to Monitor Customers 

Now, you may think your job is done once you assess the customer’s risk and verify their identity. However, KYC is an ongoing process. Just because a customer passed your KYC test does not mean they should be off the hook. 

Continue to monitor each of your customers for risky activity. Some factors you should continue keeping an eye on include: 

• Spikes in activities 

• Patterns in unusual behavior 

• Illegal activities 

If you find a current or potential customer has suspicious activity, terminate the business relationship as soon as possible. Depending on your business, you or your bank can report the activity. Banking institutions can file a Suspicious Activity Report (SAR) to report unusual customer activity. 

UCC Article Archive – 2019 – Becky Berube

You sell them out the door for a cash price. You inventory each unit and grade them or send them out for bid using an app. You bring in three companies and have them bid on your lot. You send them to a processor who assays the lot and sells the metal for you. The bottom line in recycling converters is to get paid for what’s inside.  

Only One Way 

We preach and preach about the fact that there is only one way to recycle a scrap catalytic converter. Destroy it. Scientifically test it. Pay the processing and refining charges. Sell the metal as high as you can. By now, most recyclers realize that it’s not rocket science. You need a process you can trust. You need a partner you can trust. Here is why. 

It’s What’s Inside™ 

Quiz: 

If you buy a 2012 Subaru Legacy 2.5 i Premium Sedan, with regards to the cats, you would have two resonators and one catalytic converter. It looks like a foreign pre.  

What cash amount would that bring you from the street?  

$50, $60, $70? How much do you think this small manifold converter is worth? $250, $350, $450? $550? The difference between street price and assay is significant. Look at the placement of the converter and the number and placement of the oxygen sensors. This is a clue to a higher value. It is a small unit, doing a big job. For the answer to the exact value of the 2012 Subaru Legacy manifold converter, you can email or call us. 

The point is that there is no way to tell the true value of a converter by visible inspection. Only with assay, or testing, can you know how much precious metal is inside your converters. 

The Future is Bright 

For those of you who have caught the wave, the value of the converters is a bright light and an important sale. With the depressed steel and aluminum market, the precious metals sales are helping to make the car purchase cash flow positive.  

Despite auto sales declining and converter biscuits getting smaller, precious metal loadings are increasing to meet the tightened emission standards worldwide. The supply of palladium (Pd) remains in shortage while demand remains high for 2020. This fact should support strong Pd prices in 2020.

Even with investors consolidating to take year-end profits, and geo-political factors causing a ruckus in the equity markets, the precious metal prices are up more than forty percent year-over-year.  

The 4 P’s of Converter Recycling Profitability  

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, a Program, and a Partner you can trust, and you need to learn the Power of Education.   

At United Catalyst Corporation we believe that an educated recycler is our best customer. In fact, we give you an education in auto catalyst processing and precious metals refining. We take a complex process and try to make it understandable and easy to use. We know that once you learn about your converters and your yard profile, you will increase your profits, and no one will ever be able to take advantage of you again. 

UCC Article Archive – 2019 – Becky Berube

Our mantra at United Catalyst Corporation is Getting You the Most from Your Converters with A Process You Can Trust. It is more than a slogan. It is our mission. It is our brand promise. It is what gives our work meaning. Every article I write is committed to educating you so that you can never be taken advantage of when it comes to selling scrap catalytic converters.  

Get All the Money from 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? Sell them on Assay or recovery (An assay is a test result from a sample that, if done correctly, yields the highest result.) With most converter processing companies you can take an early payment in the first week and the balance in 30 – 45 days once the assay or test results are known. 

Converter Processor, Smelter, and Refiner? What does it matter to me? 

Many of you ask us, aren’t you the refiner? The answer is, no. Most of us that you as recyclers work with are converter processors, some are converter collectors. So, what is the difference? Why does it matter to me? 

Lesson #1: There is only one way to recycle a scrap catalytic converter. It must be de-canned, milled, sampled, assayed, smelted, and refined. See Figure 1. More importantly, there is a recycling cost associated with each of those steps. Whether you sell the converter whole or on assay, it costs to recycle it. Just like the build sheet on a car, you see the price you pay, but not the individual price of all the components. If you want to see all the charges broken out, ask. A good processor will show you. 

Lesson #2: There are only a handful of end-refiners in the world. There are companies that collect converters. There are companies that process (de-can, mill, sample, assay) converters. There are companies that smelt the de-canned catalyst into a collector metal. Finally, there are companies that refine the smelted collector metal into platinum, palladium, and rhodium. A few companies do both, smelt and refine.  

Lesson #3: Which of these companies should you work with? The answer is simple. You should work with the company that can give you the most from your converters with a process you can trust, verify, and understand. In the end, that will be the company that returns highest metal value with the lowest processing and refining charges or recycling costs. The company you choose should be willing to show you what 100% of the value of your converters is and what percent you keep in a condensed or expanded invoice. A company that provides you with the 4 P’s of Converter Recycling Profitability.  

The 4 P’s of Converter Recycling Profitability 

In recent articles I have written that you need a Process, a Program, and a Partner you can trust, and you need to learn the Power of Education. A Process. 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.  A Program. You need to be able to get money when you need it to run your business. Getting you the most money from your converters shouldn’t mean you have to wait until you have a truckload or can hold out for 3 months to get paid. With most processors, you have payment choices like the ones mentioned above. A Partner. Selling on assay or recovery helps to eliminate that problem because there is a test result that can be considered the basis for the sale. However, even with this method, working with a Partner you can trust cannot be overstated. The Power of Education. We take a complex process and try to make it understandable and easy to use. We know that once you learn about your converters and your yard profile, you will increase your profits, and no one will ever be able to take advantage of you again. 

UCC Article Archive – 2019 – Becky Berube

The more we travel with recyclers, the more we hear about converter averages varying. As recyclers, you worry that you may not be getting all the value for your converters, so you try a variety of selling methods to get the best price. You sell them out the door for a spot price. You inventory each unit and grade them or send them out for bid using an app. You bring in three companies and have them bid on your lot. You send them to a processor who assays the lot and sells the metal for you. 

The Count is Still King 

No matter which way you sell your converters, make sure you and your team count the lot before you sell. Full converters. Half converters. Metallic/foil converters. Aftermarket converters. DPF converters. Empty converters ($0). Each of these units has a different average. The average can easily be manipulated by lowering the unit count to look like your average is higher. Whether you sell on your premises or ship your converters, make sure you receive the count sheet and compare it to your number. If you need a worksheet, we will gladly send you one. 

I Get Different Prices on Different Apps for the Same Code 

Maybe you sell to a few companies to compare data. Company A and Company B both have apps to inventory or look up converter values, but they are never the same. Why is that? A couple of reasons. Company A and B both have margin built into their apps and it is likely not the same. This is no different than a new-fangled price sheet. It may be built on assay or test results, but it still is not transparent. The second reason is that converters are not uniformly coated with precious metals. No matter how often you perform a test on a unit or code there will be some statistical difference due to it having a variance in its loading from the beginning.  

I Sell on Assay and My Average is Lower than what the Street is Paying  

For those of you who are selling on the scientific and verifiable method of assay, sometimes you hear that another recycler is getting a higher average than you are. There are a couple of legitimate and illegitimate reasons this can be.  

Legitimately, no one ever has the same cars or converters being processed. This is true of your own yard profile as well as comparing your yard or lot to another recycler. Expect averages to vary somewhat from lot to lot. Also, if you have late model converters, expect a smaller average weight per unit and significantly less Platinum and more Palladium and Rhodium. 

Illegitimately, the count and or the grading could have been manipulated as stated above resulting in a higher average. You may have even donated some converters for free if there was a slight of hand and you didn’t count or get count sheets.  

The worst reason you might get paid more than the true value of the converter is someone simply overpaying the market to cherry pick and dump low grade converters on the company they sell to. This happens frequently and leads to the demise of many companies involved in such schemes. All in all, it hurts the industry. Moreover, if the result is a bankruptcy it can lead to you owing money back that you have been paid in the past 90 days before the company filed.  

Sell Converters on Assay and Establish a Know Your Customer (KYC) Program  

It used to be that to work with a converter processor on refining terms, you needed to have huge volumes. Today, thanks to the work companies like United Catalyst Corporation and others are doing, processing and refining is becoming more accessible to individual automotive and scrap metal recycling companies regardless of their size and converter volume.  We believe every recycler should be entitled to get the most from their converters.  

Every article I write is committed to educating you so that you can never be taken advantage of when it comes to selling scrap catalytic converters. That includes being a victim legally as well as financially. 

In recent years, authorities in the US and abroad have increased their focus on modernizing and enforcing anti-money laundering and terrorism financing (AML) regulations. As part of these efforts, the US’s Financial Crimes Enforcement Network (FinCEN) proposed Know Your Customer (KYC) requirements in 2014, which became law in 2016. 

KYC procedures are critical to helping you analyze and monitor risky customers. And, KYC is a legal requirement to comply with anti-money laundering (AML) laws. For more information on setting up a KYC program, send us an email.  

The 4 P’s of Converter Recycling Profitability  

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, a Program, and a Partner you can trust, and you need to learn the Power of Education.   

A Process. 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. 

A Program. You need to be able to get money when you need it to run your business. Getting you the most money from your converters shouldn’t mean you have to wait until you have a truckload or can hold out for 3 months to get paid. If you can afford to do this, you may pick up a point or two more.   

A Partner. 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 to 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: 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 Power of Education. At United Catalyst Corporation we believe that an educated recycler is our best customer. In fact, we give you an education in auto catalyst processing and precious metals refining. We take a complex process and try to make it understandable and easy to use. We know that once you learn about your converters and your yard profile, you will increase your profits, and no one will ever be able to take advantage of you again.   

UCC Article Archive – July 12th, 2018 – Becky Berube

Two years ago, we were part of an auto catalyst technology seminar, held in Atlanta, GA, with 104 delegates and where 18 presentations were given by industry leaders in the field of automotive exhaust catalyst. One of the greatest take-aways from that seminar was a presentation by Peter Duncan, General Manager of Market Research for Johnson Matthey, on the future complexities of auto cat systems and what it will mean for recycling. 

What I want to share with you in this article, is an overview of how exhaust systems and converter loadings are changing. If you are selling by the piece, there is more room than ever for shades of gray when it comes to pricing. We encourage our customers to sell converters on assay, or the precious metal content within the converter, which eliminates the grading subjectivity. 

Loadings and Trends 

Basically, the tighter the emission standards, the higher the PGM (platinum group metal) loadings or cat value. The United States is predominantly gasoline engine vehicles; whereas, Europe is predominantly diesel engine vehicles. More than 90 percent of catalytic converter applications are made of a ceramic monolithic substrate, or honeycomb material; the remainder are metallic monolith substrates, commonly called foils or wires. The problem is no longer being able to identify and price ceramic and metallic converters, but rather something different.  

Where the new recycling challenge emerges is the complexity of the exhaust system architectures for both gasoline and diesel engine vehicles. The new components may all look like cats, but they do not all have value; processing some of these components with others can even ruin a load. 

Gasoline engines emit lower soot than diesel engines under typical driving conditions. Most gasoline engine vehicles contain a combination of traditional ceramic three-way catalyst (TWC). However, gasoline particulate filters (GPFs) are being added to these systems. Diesel systems can have up to 4 components to handle emissions: the diesel oxidation catalyst (DOC), a diesel particulate filter (DPF), a lean NOx trap (LNT), and some type of selective catalytic reduction catalyst (SCR) or selective catalytic reduction filter (SCRF).   

All the above-mentioned components, which resemble catalytic converters, have various amounts of PGMs, some, like SCRs and SCRFs are PGM-free.  See the diagrams below. 

Diagram courtesy of: The Association for Emissions Control by Catalyst (https://www.aecc.eu/wp-content/uploads/2017/11/2017-AECC-technical-summary-on-GPF-final.pdf) 

Shown here as well.  

Diagram courtesy of Peter Duncan, General Manager, Market Research, of Johnson Matthey, IPMI 2016 

In terms of PGM loadings, the DOCs, diesel oxidation catalysts are like regular gasoline catalysts, having even higher loadings. DPFs, diesel particulate filters, have some value, generally low.  DPFs can have one of two bases: aluminum titanate (ATI) or silicon carbide (SiC). Silicon carbide-based DPFs must be processed separately at higher temperatures with oxidation to avoid combustion. This represents higher recycling costs and when comingled can lead to lower metal yields.  SCRs and SCRFs, selective catalytic reduction catalysts and filters are PGM free, having zero value.  LNTs, Lean NOx traps have some value, albeit low.  

Whether you are buying or selling converters by the piece, these complex exhaust system architectures are beginning to pose a problem in identifying, grading, and pricing. This to say, buyer and seller beware. 

Future Powertrains and PGMs 

You may be wondering about future powertrains and how they may affect the demand and use of PGMs. In general, these powertrains are unlikely to completely replace the internal combustion engine (ICE) market but will for the most part contain similar or higher PGM loadings. Gasoline turbo direct injection (GTDI) engines have better fuel efficiency but higher hydrocarbon and particulate emissions; these will result in higher PGM use. Lean burn gasoline (LBG)engines also have better fuel efficiency but higher NOx emissions requiring LNTs and thus more PGM use. Battery electric vehicles (BEV) require no PGMs. Hybrid electric vehicles (HEV) with their “cold start” will require 10-15% more PGMs. Finally, fuel cell electric vehicles (FCEV) which are platinum heavy will also increase PGM use.  

Many people ask us, what will we do when catalytic converters are no longer circulating in the market? Our thought, based on market research, is that alternative powertrains are unlikely to replace the internal combustion engine any time soon. And, even if they did, we will just recycle the PGM-bearing components in the new powertrains.  

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.  

UCC Article Archive – August 1st, 2018 – Becky Berube 

How can you get the most for your converters with a process you can trust? 

At United Catalyst Corporation, we believe in the benefits of assay-based selling. Since no two converters are the same, and each converter must go through the same refining process, it makes sense to us that recyclers sell converters based on recovery of the metals.    

Still the recycler must choose a recycling partner and hold this company accountable to a truthful result and payment. So how does a recycler choose a company to work with for their converter recycling program? Here are five criteria that we think are important when choosing a reputable recycling partner. 

A Comparative Count 

Does the company that you are working with provide you with a count before processing your converters? Does it include whole units, halves, aftermarket converters, wire/metallic/foil converters, diesel units, diesel particulate filters (DPFs), empty units? Does the whole unit count match the number you counted at your facility before shipping within a reasonable number? Human error being what it is, in our experience, a few units plus or minus is normal for a converter check-in. The important part is that you and the recycling company agrees on the count. Also, you need to agree on how the material will be run. Most recycling companies will let you choose how you want your material combined. Ceramic converters, bead converters, diesel oxidation catalyst (DOCs), and aftermarkets can be processed and refined together from a technical perspective. Diesel particulate filters (DPFs) containing silicon carbide (SiC) should be held out and processed separately to avoid ruining the smelt. Wire/metallic/foil converters can be refined together if you have a large enough quantity to create a refining lot; otherwise, a price is pound is standard for domestic, import, or mixed material. Metallic units that are trimmed vs. untrimmed will have a different percentage of precious metal washcoat or should carry a different price per pound since the steel has no precious metal value. 

A Complete Weight Report 

Does the company that you are working with provide you with a weight report somewhere on the assay report or final invoice? The most important aspect of weights is making sure all the weight that should be accounted for is. The dust from de-canning and milling is most important since it contains the highest fraction of precious metals. Whether your company adds it back to the bulk material before sampling or samples it separately does not matter, if it is present. Some material loss during processing is normal; one to three percent (1-3%) from inert material such as insulation, pieces of steel from de-canning, moisture, and some evaporation during milling.  Weight loss greater than four percent (4%) should be questioned. What if you don’t know the gross weight from de-canning as compared to the net dry weight for settlement? If you cannot determine the weight loss during processing from the company you are working with, ask for an accounting. A one percent (1%) loss of weight could equate to a ten percent (10%) or more loss of value.  

A Mass Balance 

Does the company that you are working with balance all the weights that arrive from your facility to all the weights post processing and refining? All the converters were likely packaged in Gaylord boxes on pallets and shrink-wrapped. Once the converters are de-canned, your converter recycling company should be able to account for all the arrival weight as catalyst, dust, packaging materials, and scrap. These items should add back up to your arrival weight within a very small tolerance, say one-half of one percent (0.5%). Once the catalyst and dust are milled and the sample is prepared, the company you are working with should be able to account for this weight within a very small tolerance as well. The weight of the milled catalyst and dust makes up the gross wet weight of your load. This weight minus any scrap discharge or small amount of evaporating during milling gives you the net wet weight of your load. Finally, when the moisture percentage from the sample is determined, it is subtracted from the net wet weight to give you the net dry or settlement weight. To reiterate from the section above, the standard loss during processing is typically one to three percent (1-3%).  

A Verified Sample and Assay 

Does the company that you are working with collect an uncontaminated and representative sample of your material to be assayed? Apart from dust and weight loss during processing, a properly collected sample is paramount to you getting paid the right amount. The entire batch of de-canned catalyst and dust must be milled and free flowing into the sampling system and each particle must have an equal chance of being sampled. Typically, companies take a five to ten percent (5-10%) sample. This is generally too large of a weight and particle size for the lab and must be sampled representatively once again by taking another five to 10 percent (5-10%); therefore, roughly one percent (1%) ends up in the lab for analysis. The bulk of the milled material then goes on for smelting and refining while the sample is assayed, and the precious metal content is determined for payment.  

Does the company that you are working with pay you based on their sample and assay performed at their facility or the one collected and analyzed at the end refiner or with a third-party independent lab? The sample of record is the sample that is collected just before smelting at the smelting or refining company. The analysis can be performed by the smelter / refiner and can be done with or without verification by a third-party. Most important in the process is that all parties have eliminated sampling and analytical bias and allow themselves to be subject to verification. Most important to you is that your recycling company be willing to share the official assay results with you for the basis of your payment.  

A Fair Settlement 

Does the company you are working with have reasonable and customary recycling costs and fair market pricing? There are many different terms and contracts that can be offered for processing and refining catalytic converters. An expanded set of terms and conditions can include processing, treatment, refining, and financing charges with price market discounts depending on when you sell your metal.  A condensed set of terms and conditions can be you being paid a percentage of the ounces contained in the assay (100%) or the contractual ounces paid from the assay for each metal, platinum, palladium, and rhodium (97%, 97%, 90%, for example). This type of contract implies that all the expanded charges are included in the percent that the recycling company keeps, and the rest is returned to you. Here it is important to distinguish the true, verified 100% contained and then determine that the charges and or percentage is customary and reasonable. This pertains to the metal market pricing as well. The earlier you sell the metal and take money before the catalyst becomes physical metal, the higher the discounted price as compared to the spot or physical price. The discount can also be higher based on the availability of each metal and the lease rate attached to it.  

Choosing a company to recycle your scrap catalytic converters is no easy task. Working with a reputable company that can and will verify your count, verify your weights and balance them, verify the sample and assay is accurate, and charge you a reasonable amount to recycle converters is smart, profitable, and worth your time and energy. 

UCC Article Archive – February 13th, 2018 – Becky Berube

In converter recycling, the best recyclers know their numbers and partner with companies that educate. We encourage our customers to sell converters on assay, the verified analysis of the precious metal contained in the converters less the customary recycling costs. You want to use a scientific method because it is reliable and can be validated. By selling on the assay method and understanding key metrics, it is less likely that you will leave money on the table. 

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. Train a key person to count and inspect the converters before they are packaged up. Teach him or her the difference between the ceramic and metallic (foil/wire) converters. Without an accurate ceramic, metallic, empty, and DPF count it is impossible to know key bottom-line metrics like a true price per unit, price per pound, and average weight per unit. Like with selling whole units, these are areas that can contribute to misleading information and lost revenue. 

In this article, we want to discuss why it is necessary to your bottom line to Understand the Importance of Weights. Next to knowing your unit count, the second most important aspect of selling converters is understanding the importance of weights.  

If you’re missing weight, you’re missing money. 

When you sell converters by the piece, you are at the mercy of the grade and the count being accurate and the price being fair.  A slight of hand in any of these areas creates lost revenue. When you sell converters by the assay method, the same is true of the count, weight, and price. If you are going to get paid on the intrinsic value of the precious metal inside the converter, you want credit for everything.  

If you want to know how much money you are really making every time you sell, you must learn your true price per unit, price per pound, and average weight per unit. For those three metrics to be accurate, the burden is on you to know your count and weights and hold the converter recycling company that recycles for you accountable. 

Track your shipping and arrival weight. If you want a good ending result, i.e. maximum value, you need to agree on a beginning weight. When you receive a delivery confirmation notice from the company processing your converters make sure that the weight you shipped is very close to the weight that arrived. If you don’t have a scale, you can estimate your shipment by using 10 lbs. per converter. If the discrepancy is more than a few pounds find out why. 

Work with companies that mass balance. Mass balance means that all weights in and all weights out are measured and accounted for with a small tolerance for loss. Our tolerance is one-half of one percent (0.5%). We weigh and photograph all incoming skids and provide that to you the recycler. This is the beginning weight that we agree upon with you. Throughout the process of de-canning, milling, sampling, and assaying everything is weighed: catalyst, dust, moisture, scrap steel, gaylord boxes, pallets, trash or inert material. Inert material and trash includes things like insulation, batting, and screens that surround the ceramic catalyst biscuit or substrate. If the weights in and the weights out do not balance, the material cannot ship to the refiner. For your protection, and ours, we expect the same process at the refiner. Our job is to ensure that all precious metal contained in the converters gets paid for. 

Know your average weight per converter and price per pound. For a very long time, the average converter weighed 10 lbs. in the can and contained 2.2 pounds of ceramic catalyst. That’s approximately 20% catalyst to 80% steel. With car manufacturers demanding greater efficiency using less precious metal, we are seeing the average catalyst weight per unit trending downward to 1.8 or 1.9 pounds per unit. Recently, the average price per pound of recycled catalyst is yielding between $30 – $40 per pound. A discrepancy of even .3 pounds per unit could be costing you more than $10 a unit at $35 per pound (.3 x $35 = $10.50). Multiply that by the number of converters you are recycling, and the loss can be staggering.  

Watch your trash and moisture. On the assay report that you receive, you should be able to see a weight reconciliation. The gross weight reported will typically be the catalyst and dust from de-canning without the packaging and steel. The net weight (wet) should be the weight of the catalyst less any trash or inert material as outlined earlier. The net weight (dry), or settlement weight, will be the weight of the catalyst less any moisture determined. Normally trash and moisture will run between 1 – 3 percent each of the gross weight and the net weight (wet) respectively unless there are extenuating circumstances like exposure to moisture. The catalyst substrate is porous and very susceptible to moisture.  

The bottom line for successful recyclers who make the most money from their converter recycling program, is becoming educated and tracking the data and the money to insure against loss.