5 questions about catalytic converter recycling

1. How do recyclers remain profitable in purchasing and selling catalytic converters in volatile markets? 

The best way to remain profitable is A) to resell material as closely as possible in the same market as it was purchased and B) to ensure that material purchased has enough margin to cover potential marked swings and anticipated profit.

Be alert for any red flags, as volatile markets can bring out sellers looking to make up losses. Be aware of potential sellers that are not on the up and up.

2. How do you ensure converter programs are robust enough to survive staffing challenges?

Where possible, always have a buyer in training. There should never only be one point of knowledge in a company when it comes to converters.

Next, partner with a downstream converter processor that offers purchasing support and training. When purchasing tools are simple, intuitive and monitored, converter programs can thrive in challenging employment environments.

3. Why are converter lot averages misleading?

Averages can be misleading because they depend on who is counting and how. There are five distinct types of converter materials, and not everyone counts them the same. With no industry standard for grading and evaluating material, there is a lot of room for presenting information in a less than accurate light. When converters are evaluated on a toll-refining basis, there are measurable facts—weight of the material, precious metal content and market pricing. Base averages on the facts and not feelings.

4. How does a recycler know they are being paid correctly for their catalytic converters?

When selling material by the piece, there is far too much conflicting information regarding value. Ultimately, converters are sold by toll refining them and being compensated for the contained precious metals. Knowledge as to how to properly compensate comes from a selling history to a reputable toll refiner. Even though there are some piece buyers out there that always seem to have stellar prices on some units, these buyers are still reliant on the toll-refining process. They can’t be overpaying on everything and still be conducting legal business.

5. What is the future of catalytic converter recycling?

For the foreseeable future, catalytic converter recycling has wheels. There are many uses for the PGMs that are recycled from converters—while primarily 80 percent of palladium and rhodium are used for internal combustion gasoline engines, demand will be ongoing for many years to come. While the world is searching for solutions to reduce greenhouse gasses, new technologies have not been able to replace the dependence on fossil fuels. Projections for entirely electric vehicles dominating the market take us 20-plus years out. This is due to limited raw materials and the ability to transform them to meet the electrification demands. While electric and eventually hydrogen-electric vehicles look like they will replace conventional transportation methods, market share for these vehicles will take decades to overshadow internal combustion engine vehicles. Meanwhile, hybrid gasoline/electric will begin to dominate the automotive sector. Hybrid engines require higher loadings of PGMs to operate cleanly, thereby solidifying converter recycling as a viable business for the foreseeable short, mid- and long term.