5 questions about strategic thinking for converter success

1. Why should recyclers pay attention to converter operations, even if they are a small portion of their business?

Converter operations should be prioritized for three reasons:

• Highly profitable material. Converters contain valuable metals like platinum, palladium and rhodium. Despite market volatility, the prices of these metals have increased since 2017, offering significant returns.
• Additional revenue. Capitalize on revenue opportunities, especially as scrap becomes harder to obtain.
• Growth potential. With the right processing partner, recyclers can expand converter volumes or increase profit margins, boosting overall revenue.

2. How can recyclers optimize converter profitability in today’s market?

To maximize profits from converters, recyclers should focus on three key aspects:

• Security and handling. Prevent losses by properly dismantling converters to avoid ceramic damage. Implement strong security measures to ensure staff accountability and prevent theft or substitution.
• Timing the market. Choose a processing partner with low lot requirements and fast turnaround times to enable buying and selling in the same market period, mitigating sudden price drops. They also should provide market insights and historical data to guide your selling decisions.
• Expanding opportunities. After covering the basics, focus on growth. Reinvest profits to expand your business and market share. A reliable partner with standardized practices and automated safeguards can help stabilize your business and support aggressive accumulation of converters and cars.

3. Which converter KPIs should recyclers monitor?

Recyclers should audit these top five converter KPIs:

• Converter count. Maintain an accurate inventory of converters, noting the total count and types. This ensures the accuracy of the processor’s grading report.
• Partial percentage. Track the fullness of each recycled converter unit, noting if the biscuit inside is fully gone, partially intact or completely full.
• Parts per million. This metric on an invoice indicates the precious metal content in a converter load. Accurate PPM readings are essential for fair pricing.
• Weight per converter. Average converters contain about 2 pounds of honeycomb. A weight above 2.3 pounds suggests older converters with lower PPMs and below 1.8 pounds indicates newer units with high PPMs. Accurate weight tracking requires a complete grading report.
• Returnable ounces. Derived from processed weight and PPMs, this metric helps identify patterns and assess hedging accuracy.

Tracking these KPIs allows recyclers to detect irregularities and make informed corrections based on reliable data.

4. What tools are necessary for achieving operational efficiency with converters?

First and foremost, having the right team in place to handle the purchasing, management and handling of your converter material is essential. Additionally, recyclers should have access to a system that enables them to monitor employee converter purchases, control purchasing margins and maintain a comprehensive overview of converter inventory.

5. How can recyclers stay ahead of changing legislation in converter buying and selling?

Stay compliant with local, state, national and emissions standards for converter transactions by adapting operations to new regulations.

Visit your city’s official website and search the municipal code for relevant regulations. Track state bills and acts on Bill Track 50 or the National Insurance Crime Bureau’s website. These platforms show current session bills, including those in committee, declined or enacted. Use the advanced search tool on congress.gov by typing “catalytic converter” in the Words and Phrases tool. Bookmark these websites and check them regularly to stay updated on legal changes.