Catalytic converter recycling in the UK and Europe

In a previous post I looked at the size of the catalytic converter recycling market globally, in terms of both the amount of precious metal recovered and their cash value.

To save you the hassle of reading that post again, the key takeaways were:

  • The total Pt + Pd + Rh recovered globally from scrap cats is about 8 million ounces
  • With a value of about $2.4 billion / £1.9 billion / €3 billion, annually.

Many may agree that catalytic converter recycling is a reasonably sized global market, and in this post I zoom in a bit to have a look at the market in Europe and Great Britain as it was in 2014, which is the latest data available.

This time I will keep it brief, though again the important info to consider for catalytic converter recycling are the number of vehicles on the road, the number of end-of-life-vehicles (ELVs) scrapped per year, and the amounts of precious metals recovered.

So let’s kick off with number of vehicles on the road.

Vehicles on the road, GB & EU

Germany takes top spot with close on 48 million vehicles on the road, followed Italy, France and the UK on around 37,000,000. You can see the rest on the graph below. Total vehicles on the road in the EU (+UK): about 295 million, which is a touch more than in the States.

So, lots of vehicles (and therefore cats) on the road. That’s great to know for some time in the future catalytic converter recycling, but that doesn’t do us much good for now; the average wait until end-of-life in the EU is somewhere between about 7 and 11 years, depending where you are.

So then, what about ELVs per annum?

End-of-life vehicles GB & EU

Here the tables are turned and the UK takes pole position, clocking in at around 1,100,0000 vehicles scrapped in 2014, slightly ahead of France, and quite some away ahead of the others. Germany (with most vehicles on the road) only scraps about half of the UK total. I could spend time banging on about the disconnect between number of vehicles on the road and the number scrapped in different countries (average vehicle age, maybe?), but that’s likely to keep very few readers riveted. What we are really interested in for catalytic converter recycling is the number of cats coming off the road annually, which for the whole EU + UK is around 6.3 million!  Looked at another way, on average for every 50 vehicles on European roads, 1 is scrapped every year.

At this point I want to throw another dataset into the mix: the total tonnage for catalytic converter recycling from ELVs in the EU is around 11,500 tonnes! That’s about the same mass as 140,000 average blokes, enough to pack Wembley out more than 1.5 times!

What is not entirely clear though is whether this tonnage is just the decanned matrix, or the whole cat. The data (and the resulting graph, below) is based on data published by the European Commission, so I have little reason to doubt it, but if anyone has any further insights I’d much appreciate hearing from you.

Catalytic converter tonnage, GB & EU

We’ll take the data with a pinch of salt until there is some clarity, but in the meantime this geographical distribution of the catalytic converter tonnages recycled looks like it may be based on smelter / refinery locations. Perhaps, and read into that what you will, but what took me by surprise is how far ahead of the pack France is, nearly triple that of Germany, and about 5x that of the UK’s 1,140,000 kg!

Moving on, let’s now dig a bit deeper elsewhere by looking at the data of platinum group metals (PGM) recovered from catalytic converter recycling in 2014 (see here for a more detailed post and some 2015 data).

Turns out that some 908,000 oz of PGM was recovered from scrap catalytic converters in Europe in 2014, graphically shown below.

Catalytic converter recycling PGM GB & EU

At today’s metal prices, that works out at about $820,000,000 / £656,000,000 / €775,000,000.

What is not apparent at this stage is just how much of this actually originated in Europe, because as we know some of this stuff is shunted around the planet like crazy, depending on where can get best treatment and refining terms.

I’ll leave it at that for now, though in case you’re wondering what the point of this post is, it is part of an analysis for the future of the global catalytic converter recycling industry in the face of what are likely to be some seriously disruptive developments.

We’d really appreciate your participation in the discussion; we value other industry voices and opinions. To keep updated, sign up and we’ll drop you the occasional email.

Just how big is the scrap catalytic converter industry?

The numbers vary from year to year of course, so for the sake of simplicity let’s have a closer look at the size of the scrap catalytic converter market in 2015, the most recent year for which reliable (proxy) data are available.

To get to grips with the scrap catalytic converter business, we take a bit of a detour to consider the global number of vehicles produced, the number of vehicles on the road, and the number of ELVs (End of Life Vehicles). These are directly related to what we’re really interested in: the amount of Platinum Group Metals (PGM) that go into cats, and how much of these precious metals are recovered.

Vehicle production & the scrap catalytic converter

By “vehicles” we mean passenger and commercial vehicles, powered by both diesel (with Pt-dominated catalysts) and gasoline (with Pd-dominated catalysts) engines. For simplicity we assume that each new vehicle has a catalytic converter, which is probably true for a very high percentage of them, although difficult to establish exactly.

It is also worth noting that over recent years the ratio of passenger to commercial vehicle remains fairly consistent at around 3:1, so for every 3 passenger vehicles, one commercial vehicle is produced.

So in 2015, around 91,000,000 vehicles were produced, which comprised 69,000,000 passenger and 22,000,000 commercial vehicles*.

Numbers this size can difficult to visualise, so think about it this way.

If each vehicle was one step, you would walk around the earth about 2.25 times.

Or, if each vehicle were one second, nearly 3 years would pass.

That’s a lot of vehicles. Per year. And the rate of production is not decreasing; it’s expected to top 100,000,000 as early as 2018.

So where are all of these vehicles being produced?

China, as with so many other things, outstrips the rest of the world substantially in vehicle production, followed by the usual suspects (US, Japan, etc) and a long tail of minor producers.

Global Vehicle Production - scrap catalytic converterAnd how much PGM is needed for the catalytic converters on all of those vehicles ?

About 10,500,000 troy ounces of Pt + Pd + Rh was consumed by the global catalytic converter manufacturing in 2015, which at today’s price is worth around US$ 8.9 billion. We’ll look into the metals in more detail below.

All very interesting, but remember this is production for only 1 year. And we’re not terribly interested in brand-new vehicles here, but rather those that are on their way to giving up the ghost. So, how many vehicles are on the road right now? And where are they?

By some estimates, there are around 1,200,000,000 (that’s 1.2 billion), vehicles on the road at present, and this is set to rise to 2 billion in the next 20 years or so. That’s a lot of vehicles, and a lot of catalytic converters, once again best visualised in other terms.

A stack of 1.2 billion new dollar bills would reach about 130 km (80 miles) high.

Or, if each vehicle was one second, all the vehicles on the road today would be the equivalent of 38 years!

Geographically, most on-the-road vehicles are in the EU (+UK), followed closely by the US, then China, Japan, Russia etc.

Vehicles on road - global scrap catalytic converterSo we know that there are a lot of vehicles on the road, but our main interest is how many of them (and their cats) are coming off the road, however they may end their lives. That leads us to where and when all of these vehicles end their lives.

Figures for vehicles reaching the ends of their lives annually in specific countries such as the US, UK, EU and others are pretty well documented, and we’ll get into those numbers in a bit more detail in a later post.

In the meantime, consider that the average vehicle age in the US is 11.4 years, and around 7.7 years for the UK, 9.7 for the EU and 7.5 in Japan. Some estimates state about 27 million vehicles (and by extension, their cats) reach the end of their lives globally each year. When compared with the 90 million or so produced annually, you get an idea of the growth of on-the-road vehicles.

So then, on to the precious metals we are interested in.

Precious metals and the scrap catalytic converter

Globally, supply of platinum, palladium and rhodium comes from mining and recycling, i.e. primary and secondary sources. Recycling includes jewellery, various types of scrap catalytic converter, and lesser quantities of other industrial scrap.

For interest’s sake, let’s look at how much supply from scrap catalytic converter stacks up against other primary and secondary sources (once again 2015 data):

PGM supply - scrap catalytic converter
We see that of more than 17 million ounces of Pt + Pd + Rh produced globally in 2015, about 2.8 million ounces came from recycled scrap catalytic converter, which is around 16 %.

2,800,000 oz total PGM from scrap scrap catalytic converter sounds like a lot, so let’s break this down a bit to see how much it really is.

The number of troy ounces recovered globally from scrap catalytic converter is made up of

Pt: 931,000 oz (28.96 metric tons) – 33%
Pd: 1,605,000 oz (49.92 metric tons) – 57%
Rh: 282,000 oz (8.77 metric tons) – 10%

How much is this physically, say, as a cube of solid metal?

Recalling the densities of the different metals outlined in a previous post, this could be imagined as solid metal cubes (in metres cubed) with sides of length (in cm).

Pt: 1.35 m3  (111 cm)
Pd: 4.15 m3  (161 cm)
Rh: 0.71 m3 (89 cm)

PGM recovered volumes - scrap catalytic converter

At today’s prices this is worth around US$ 2,400,000,000. As a random comparison, a similar dollar value of copper would weigh in at about 390,000 tonnes and occupy a cube with sides about 35 metres long!

$2.4 billion globally is a sizeable market, and geographically it is broken down as in the graph below.

PGM recovered regionally - scrap catalytic converter

North America leads by some distance, with 50% of all PGM recovered from scrap catalytic converter globally.

Also, the relative proportions of Pt, Pd and Rh recovered vary greatly between these geographies, depending largely on fuel type. Passenger vehicles in the US are predominantly petrol / gasoline fuelled, while in Europe they are mostly diesel. This split is reflected in the relative proportions of metals recovered from scrap catalytic converter, as shown below.

PGM relative recoveries - scrap catalytic converter

More detail on this, and country by country breakdowns, is available on request.

When we look at the regional number of vehicles (i.e. number of cats) on the road by region, and compare it with the amount of PGM there is a distinct disconnect.

Vehicles vs PGM - scrap catalytic converter

Over half of all the PGM recovered from scrap catalytic converter are in North America, even though they have only about 23% of vehicles (i.e. cats) on the road.

This comparison of course points to where the smelters and refineries are, which will be the subject of a later post, and available in detail to premium subscribers.

To conclude

This perhaps rather meandering post looking into the size of the scrap catalytic converter market globally can best be summarised by the following bullet points:

  • About 90,000,000 catalytic converters are needed for new vehicles each year
  • These new catalytic converters need about 10,500,000 oz of Pt+Pd+Rh, per year
  • The value of the PGM for annual new vehicle cats totals about $8,600,000,000 at today’s price
  • There are about 1,200,000,000 vehicles currently on the road globally
  • From these, around 27,000,000 cats become available as scrap from ELVs, per year
  • About  2,800,000 oz of Pt+Pd+Rh are recovered annually from these scrap catalytic converter
  • The value of PGM recovered from scrap catalytic converter annually is about $2,400,000,000

All of this begs the question of the future of the scrap catalytic converter industry, especially with the rise of some truly disruptive technologies which are likely to change how we transport our goods, and ourselves. We’ll be covering all of this and more in future posts, and we hope you’ll join us on the journey.

Precious metal in scrap catalytic converters

The question of how much precious metal in scrap catalytic converters is, not surprisingly, very commonly asked.

But only few (if any) of the guides and resources available give the actual content of platinum, palladium and rhodium, mostly because the information can be difficult and expensive to come by.

We discuss in more detail the quantity of precious metal in scrap catalytic converters here and here, but in this post we get a better feel for the question using simple visualisation.

Let’s first take a look at some of the properties of the precious metals in scrap catalytic converters.

Platinum, palladium and rhodium

Platinum is one of the denser metals, about 21.45 x that of water. Palladium clocks in at a bit more than half of that, at around 12.02, while rhodium is about 12.41. By way of comparison, gold is 19.32, while copper is only 8.96. Water, obviously, is 1.

The image below approximates these metals’ densities in relation to the volume of water.

Density of precious metals in scrap catalytic convertersLet’s consider this another way:

A normal matchbox like the one below would have a volume of about 22.2 cm3.

matchbox - standard
Now if this matchbox was completely filled with platinum, it would weigh around 476 g (15.3 oz*), or about the same as half a kitten.

The weights for the other metals, should they fill the matchbox, are shown in the graph below. Au, Cu and H2O are also shown, for comparison.

mass of metals - matchbox

This is all very well, but how much is this hypothetical matchbox stuffed with precious metal actually worth?

At today’s NY spot prices…

A platinum-filled matchbox would fetch over $15,000. Gold, a fraction more.
A palladium matchbox: $6,500. A bit more for rhodium.
Copper-filled: $1.20.

metal value

So now we have a feel for some of the properties and the relative value of platinum, palladium and rhodium. Next we’ll have a look at these precious metals in scrap catalytic converters.

Precious metals in scrap catalytic converters

Firstly, I want to get something out of the way. There are thousands of different catalytic converters out there, manufactured globally over decades. Their precious metal content is highly variable, both in terms of absolute quantity, and relative proportions, of platinum, palladium and rhodium. It is doubtful that anyone has precious metal content information on all (or even most) of them. So the info below is based on our data, which we have found to serve our purpose well enough.

So then, let’s have a look at this in a bit more depth.

Because Platinum Group Metals are highly effective catalysts, it doesn’t take much for them to do their job. So, tiny amounts of precious metals in catalytic converters are ‘stuck’ on a substrate (usually a cordierite structural ceramic monolith, the so-called ‘honeycomb’, though also foil or beads) in a very thin layer.

To show just how much (or little) platinum, palladium and/or rhodium is actually in your average catalytic converter, consider that a 1kg monolith will on average contain less than about 3 g total precious metal. That’s less than 0.3%.

The image below puts that in perspective: if the blue dots represent the monolith, the total amount of contained PGM will be the red dots.

average pgm in scrap cats

Put another way, if you compare the monolith to a 24 hour day, the average total precious metal content is the equivalent to about 4 minutes

So we see that there is not terribly much total platinum, palladium and rhodium in the average catalytic converter.

Going back to our example above then, how much catalytic converter scrap would you need to fill our matchbox with recovered platinum group metals?

Based on our experience and database, about 200 catalytic converters should do the trick.

But of course it is not as simple as that, because there are a whole series of costs and losses in the process of metal recovery that need to be considered. We’ll be revisiting these issues in an upcoming post, as well as our proven strategies to maximise the value of scrap catalytic converters.

 

Notes:
When we refer to oz, it always means troy ounces. 1 troy ounce = 31.1035 g.

Sometimes we refer to PGM, i.e. platinum group metals. Technically PGM include ruthenium, osmium and rubidium as well, though we of course are only interested in Pt, Pd and Rh.

 

Taking control of the price you get for your scrap catalytic converters

You’re in the scrap catalytic converter business because you want to make money. But, more often than not it seems as though you’re getting LESS cash for your cats than you had expected.

If this sounds familiar, you are not alone.

Fortunately there is a solution, and we’ll show you what YOU can do about the price of your scrap cats, whether you are a vehicle breaker, collector, broker or trader.

the starting point

Albert Einstein, the world’s most famous brain donor (sort of), said it best:
“Compound interest is the eighth wonder of the world. He who understands it, earns it … he who doesn’t … pays it.”

While Einstein was referring to interest earned on money, the same process operates very well in our business. Unfortunately it’s usually to the negative, and as a consequence we see a lot of people in the autocatalyst trade who “pay it”, unnecessarily leaving a LOT of money on the table in the process.

Allow me to explain:
We’ve nailed down 5 key drivers for the value of scrap cats. I’ll get into more detail about what these drivers are a bit later, but in the meantime let’s just call them Price Driver A, Price Driver B…etc.
Crucially, most people in the business believe they have NO control over these price drivers. As a consequence, most are price takers and entirely at the mercy of the price drivers, which invariably act to the downside.
Being out of control of the prices you get for your cats is not ideal, not necessary, and is losing you a lot of cash.

Let’s look at this a bit closer.
In isolation, each of these price drivers has only a limited impact on the cash you get for your scrap autocatalysts. When these price drivers compound, they have a dramatic downward effect on the cash received for your cats.
BUT, once you take control of the price drivers, you can turn this compounding effect to your advantage.

To demonstrate, let’s consider a simple hypothetical example:
You’ve got a pile of scrap catalytic converters, say one hundred pounds of decanned matrix, and you manage to figure out that overall your pile contains 0.2% Pt, 0.1% Pd and 0.05% Rh.
That works out at about 6.2oz of platinum, 3.2oz of palladium and 1.6oz of rhodium. After you check the price charts and add it all up, you find that it’s worth $10,000*.

Ok great. But, you also know that $10,000 is the in-situ value of the contained precious metal, which you are NOT going to get. Because you are not in control of the price drivers, you resign yourself to taking a cash hit. But just how much of a hit will it be?
Let’s look at it in terms of our 5 price drivers, which for the sake of this example we assume each have a 10% negative effect on the cash you get for your lovely pile:

So a $10,000 in-situ metal value after being affected by the 5 compounding price drivers can become $ 5,904 like this:

Scenario 1
Price Driver A: -10% = $9,000
Price Driver B: -10% = $8,100
Price Driver C: -10% = $7,290
Price Driver D: -10% = $6,561
Price Driver E: -10% = $5,905

That’s a more than 40% reduction of your $10,000. Not great.

Now, suppose that you could get a bit of control over these five price drivers, where instead of -10%, we manage -5%. Your $10,000 instead looks like this:

Scenario 2
Price Driver A: -5% = $9,500
Price Driver B: -5% = $9,025
Price Driver C: -5% = $8,574
Price Driver D: -5% = $8,145
Price Driver E: -5% = $7,738

The difference between Scenarios 1 & 2 is $1,833. That’s a 31% increase on your cash return, just for taking a bit of control of the 5 price drivers!

Now think about what’s possible when you take more and more control of these drivers…

Platinum Group Metal Prices

Previous posts quantified the impact PGM (Platinum Group Metal) prices have on the cash value of scrapped  autocatalysts. Our strategy to maximise the cash value for scrap  autocatalysts is based in part on taking a view on the future prices of Pt, Pd (and to a lesser extent, Rh).

In this November 2015 post, we considered a scenario where Pt, Pd and Rh prices may remain depressed in the medium term, say 1 to 3 years, and rally strongly thereafter. This scenario is based on an interpretation of the fundamentals of the PGM market, briefly outlined below, and does not constitute advice in any way.

Firstly, a snapshot of PGM prices since the global financial crisis to provide some context for the prices of platinum, palladium and rhodium, in the graph below. From this plot it is clear that platinum and rhodium have had particularly difficult time, while palladium has fared somewhat better although still not spectacularly.

pgm-prices autocatalysts

 

 

 

 

 

 

The current low prices of platinum, palladium and rhodium align with the ongoing negative sentiment towards metals generally, owing largely to the slow-down in China. Offloading of longer term PGM investment inventory has exacerbated the decline, with large quantities coming to the market in a relatively short time. Virtually every traded metal has seen a substantial price decrease in the last six months or so, with not many analysts bold enough to call the bottom just yet.

The platinum price in particular has not been helped by the recent rise of diesel-skepticism. Bearing in mind that Pt dominates in diesel engine  autocatalysts, as palladium does in petrol / gasoline engines, the price of Pt has dropped about 8% and that of Pd increased about 11% since the VW emission rigging fiasco a few weeks back. The obvious correlation (though not necessarily the cause) is a perception that as a consequence consumers will in future favour gasoline over diesel engines.

How long this will remain in the market’s memory remains to be seen, though it does tie in with a longer-term niggle about certain diesel engine emissions (particulates and nitrogen oxides) which has some punters speculating on the eventual decline of diesel power.

However, for the emission that matters most in the calculus of the bureaucrats, i.e. CO2, diesel engines emit significantly less than their petrol counterparts. As such, and considering legislated CO2 emission targets in many countries, diesel power is unlikely to go away any time soon. It is not inconceivable then that in the not too distant future diesel-engine  autocatalysts will require additional platinum (+Pd +Rh) to adequately convert emissions, bumping prices up commensurately.

Another demand-side price driver is jewellery, which some analysts predict will pick up substantially particularly in Asia. This, electronics & other ‘industrial use’ aspects, as well as PGMs as a vehicle for investment will be considered in a later post.

On the supply-side, there are numerous major factors which are difficult to overcome likely to influence future production of PGMs. These relate specifically to primary production from mining operations, as opposed to secondary production from recycling.
By a very long way the largest primary platinum producer is South Africa (about 80%), while Russia just edges South Africa out in primary palladium production (around 45% & 40% respectively). Other primary producers trail some way behind, including Zimbabwe, Canada and a handful of minor producers.

In South Africa, mine production challenges include labour unrest & lack of mechanization, energy (electricity) and water supply limitations, increasing mine age, depth and cost of mining, and possibly decreasing PGM grades. These issues are likely to remain in the medium to long term, and even with the South African Rand plunging against the dollar, mined Pt production has been steadily declining over the last decade or so, despite a more recent up-tick. So much so that many analysts foresee a substantial platinum supply deficit in the coming years.

Russia comes with its own baggage, with sanctions related to the Crimean annexation cited as one of the reasons for palladium’s relatively good price performance recently. Further uncertainty over its palladium stockpile status and production capacity have similarly contributed.

While there will always be mitigating factors, taken as a whole it is not inconceivable then that current PGM prices may remain depressed in the short to medium term. Once the realities of supply constraints kick in, particularly if they coincide with the (perception of) improvement in the global economy a few years down the line, upward pressure on PGM price could be significant.

Time will tell.

Combined Effects Of Price Drivers

Earlier posts examined how the cash price received for scrap autocatalyst is affected by the position of a trade in the supply chain, processing costs, and the PGM market price. The combination of these three factors is considered here, showing the powerful compounding effect they have driving autocatalyst prices.

For simplicity, other modifying factors such as pre-processing metal losses, G&A, logistics, bullion management and others are not considered here.

To recap, we saw that compared to the price realised ‘at smelter’, a vehicle dismantler at the base of the supply chain could receive as little as 66% to 75% of that price, and possibly less, depending on the number of autocatalyst dealers in the chain.

The ‘at smelter’ price is itself around 80% of price of the contained or ‘in-situ’ precious metals due to processing losses and fees.
As a consequence, it is perhaps not uncommon for a vehicle breaker at the base of the supply chain to receive 66% x 80%, i.e. a little over 50%, of the value of contained precious metal of their autocatalyst.

Consider then that in the past year (as opposed to YTD) Platinum Group Metal (PGM) prices* have decreased around 30%, and substantially more than that from their all-time-highs around 2007-2008.

To illustrate, one year ago a dismantler’s scrap autocatalyst with an ‘in-situ’ (i.e. contained metal) value of $100 would have fetched them around $50. For the same scrap cat today, the in-situ value is around $70, and the dismantler can expect about $35.

Scrap Catalyst Supply Chain – Value Implications

In this post we consider the effect of a dealer’s position in the supply chain on the cash value realised for their scrap catalyst stock. This is one of several interrelated factors affecting prices received for scrap catalyst (others being processing costs and PGM market price) that the Scrap Catalyst Hub strategy seeks to mitigate.

Scrap catalyst follow a route up the recycling supply chain from dismantled end-of-life vehicles through a variety of dealers, collectors and pre-processors, and finally to smelters and refiners for recovery of the precious metals platinum, palladium and rhodium, as below.

scrap catalyst supply chain

Anecdotally, a scrap catalyst can pass through up to 5 middlemen before arriving at a smelter for processing. While such cases are possibly the exception rather than the norm, what is certain is that at each stage up the supply pyramid a margin will be extracted.

It is not difficult then to see how scrap catalyst dealers at the base of the supply pyramid will be affected, receiving a fraction of the cash value of the precious metals contained in their scrap catalysts.

There are of course many variations on the theme, though to demonstrate a possible cash price reduction down the supply chain, we consider a scenario whereby a scrap catalyst passes from
• vehicle breaker
• collector / dealer
• collector / pre-processor
• smelter

In an effort to not overstate the price reduction, two price mark-ups (10% and 15%) are considered and compared for each stage in the supply chain. While perhaps conservative, it seems a reasonable figure to cover costs and provide a modest (?) margin. Any comments or views on this are welcome in the section below.

Using these assumptions and considering the price received ‘at smelter’ as 100%, we see that at the base of this supply chain model, the vehicle breaker sees only between about 66% and 75% of the cash price ‘at smelter’. While the obvious solution for those at the base of the supply chain would be to cut out the middlemen, an alternative route to smelter is not always available.

For an overview of other factors at play in scrap catalyst pricing, follow the links to the posts on processing losses and metal market prices. To access information on our strategy for maximising the cash value of scrap catalytic converters, subscribe for FREE.

Losses In Processing Scrap Catalytic Converters

A question often asked in the recovery of precious metals from processing scrap catalysts is about “metal accounting”. In other words, how does one reconcile the known content of platinum (Pt), palladium (Pd) and rhodium (Rh) in a scrap catalytic converter with the quantity of metal actually recovered? And by extension, how does this relate to cash value?

processing scrap catalysts

 

 

 

 

 

 

The key takeaway is that during the process of precious-metal recovery:
Around 15% of the physical metal in-situ* is ‘lost’.
Around 20% of the in-situ cash value of the metal is lost.

To account for this, we consider the combined effect of physical losses, costs and fees in the processes of PGM recovery by smelting and refining, as well as other less-quantifiable factors that come into play pre-processing. Although simplifications and approximations have been used for this purpose, these are supported by our research and experience processing scrap catalysts.

Pre-processing losses

A lot of dismantlers, scrappers and other cat dealers have very good knowledge of the amount of Platinum Group Metals (PGMs) in individual catalytic converters, whether by hard-won experience or by the increasingly reliable (?) catalogues commercially available. As far as is known (and I stand corrected), most of the available catalogues are based on the catalytic converter manufacturers’ specifications, i.e. as new. Departure from these PGM content specifications is however likely for a number of reasons:
Physical disintegration during the functional lifetime of the catalytic converter before it is scrapped. Dependent on age and vehicle usage factors.
After scrapping, during dismantling, storage & transportation, improper handling has been observed to physically break the monolith, resulting in some loss
Decanning, monolith** crushing and sampling have been observed to result in loss of monolith material if not done carefully.

These pre-processing losses are likely to be highly variable and are difficult to estimate. The only way to determine the precise PGM content is by elemental analysis of the (crushed and homogenised) monolith material immediately prior to processing. Some processing facilities offer an in-house or 3rd party laboratory analytical service, although handheld XRF (X-ray fluorescence) spectrometers such as those of Thermo-Scientific and Olympus provide accuracy and precision to near laboratory standard (and will be the subject of a later post).

Processing Losses

Included here are losses that are unavoidable due to the technical processes of metal recovery, as well as those deductions which are frequently levied by smelters and refineries as part of their processing fees.

There are several metallurgical methods to recover the precious metals from scrap catalysts, including hydrometallurgical, pyrometallurgical and other novel techniques such as deep eutectic solvents or ionic liquids, amongst others. An overview of these methods will be given in future posts, though for the current purpose we will consider the typical process pathway for economically processing large quantities of PGM-bearing material, broadly:
Smelting: Pyrometallurgical treatment, typically in a plasma-arc or other very high temperature furnace, of crushed monolith to produce a PGM-enriched alloy. Non-recoverable PGMs mostly report to the slag, with recoveries typically in the region of 97% for Pt and Pd, and as low as 85% for Rh. In addition to these physical process losses, the cost of smelting (the ‘treatment cost’) ranges up to around $3.50 / kg of monolith matrix treated, or up to 5%*** of the gross in-situ value of contained metal.
Refining: Multi-stage hydrometallurgical (chemical) and pyrometallurgical recovery and separation of the PGMs to produce high purity bullion (99.95% or better for London Good Delivery). Here we consider the common approach of ‘paid metal’ to cover the charges, which may be in the region of 90% for platinum and palladium, and around 75% for rhodium. The refinery thus extracts its profit by withholding a percentage of the metal recovered. For our purpose this is considered a loss metal for the scrap cat dealer.

Taking all of these processing losses into account, metal losses of around 15% and cash value losses of around 20% can be expected from the gross in-situ precious-metal content of a catalytic converter.

These losses are compounded by current metal prices at or near historical lows, supply chain positioning and various other factors.

Follow our posts as we continue to discuss all aspects of the market as relevant to scrap catalyst dealers, and how to maximises the value of your autocat stock when processing scrap catalysts.


*In-situ: relating to the gross metal content in an unprocessed catalytic converter.
** ‘monolith’ is analogous to the frequently used terms ‘honeycomb’ or ‘matrix’, the synthetic extruded cordierite (Mg-bearing aluminosilicate) host of the thin layer of PGM catalyst.
***estimate variable, proportional to metal price and grade.

Effect Of Declining PGM Price On Scrap Catalyst Value

Prices of platinum palladium and rhodium are down 30 % or more over the last year or so (as of Sept 2015), and as seen in the charts at the bottom of this page. To understand the impact of this decline on the prices of scrap catalytic converters, we have applied average platinum palldium and rhodium monthly prices to the our database* of scrap cats (see previous posts) and plotted in Figures 1 & 2.

From these charts, we estimate that the corresponding decline in the average price of scrap catalytic converters over the last year has been over 20% in British Pound terms, and close to 30% in Dollar terms.

catalytic converter value decline

 

 

 

 

 

Fig. 1 Average $ value decline of scrap catalysts.

catalytic converter value decline 2

 

 

 

 

 

Figure 2. Average £ value decline in scrap catalysts

As described in previous posts, an in-situ’ value of contained platinum palladium and rhodium is compared with a “true” value or Net Smelter Return, which represents an expected return once all processing and other costs are taken into consideration. Note however that this applies to the average catalytic converter in our database*, and is for representative purposes only.

The Cash Value Of Catalytic Converter Scrap

In this post we consider the cash value of scrap catalytic converters in the Scrap Catalyst Hub database*. Through basic analysis we will arrive at what we consider are realistic value estimates, with a view to developing a model for recovering maximum value from scrap catalytic converters.

In summary, we have considered the processing, refining costs and other factors that influence the difference between the in-situ or contained PGM value, and the likely or expected cash return once all metals have been recovered. Table 1 shows the headline figures of the difference between values for the scrap catalytic converters, and Figure 1 shows the real reduction in (dollar) value. Figure 2 shows the reduction in value as a percentage for all cat models in our database.

value of scrap catalytic converters

 

 

 

Table 1. The difference between contained PGM value and a likely cash value, post-processing of scrap catalytic converters.

value of scrap catalytic converters 2

 

 

 

 

 

 

Fig. 1 Scrap catalytic converters’ in-situ metal value (blue) as compared to an estimated expected value (red)

value of scrap catalytic converters 3

 

 

 

 

 

 

Figure 2. Percentage reduction between the in-situ and expected values of metals recovered from scrap catalytic converters.

Valuation

Factors influencing the value of any particular end-of-life scrap catalytic converters include
• Total Platinum Group Metal (PGM) content
• Proportion of Platinum : Palladium : Rhodium
• The Pt, Pd & Rh market prices
• Treatment and refining charges / paid metal
• Recoveries, losses & penalties
• Pre-processing (Decanning, grinding, analysis)
• Logistics
• G & A

In addition to the above, consideration has to be given to where in the supply chain a sale is being made. It is not uncommon for scrap catalytic converters to pass through several middlemen (by some accounts, up to 4 or 5) before finally landing at the smelter or refinery. Each of these stages in the pyramid-shaped supply chain require a margin and diminish the cats’ value.

Two earlier posts (here & here) considered the amount of Pt, Pd and Rh in both percentage and absolute (troy ounce) terms of several hundred catalytic converter models in the Scrap Catalyst Hub database. Calculation of a “Platinum equivalent” was considered to enable comparison between scrap catalytic converters, to account for variable Pt, Pd & Rh content and metals prices. The same data will be used in the following discussion of scrap catalytic converter value.

An in-situ value may be derived simply by multiplying the metal content by the market price, although would be incorrect and misleading to consider as a cat’s true value (although will be presented as a baseline for illustrative purposes).

Metal prices used are as of 5 June 2015 i.e.
• Pt – US$ 1100.00
• Pd – US$ 755.00
• Rh – US$1105.00

All metal recovery process pathways have associated losses of the in-situ metal content. In this case we have considered a pyrometallurgical route with typical smelting and refining process recoveries of:
• Pt – 99%
• Pd – 98%
• Rh – 92%

Other losses through catalyst damage and / or poor decanning and handling procedures are likely, though difficult to quantify and are ignored for now.
A smelter charge may apply, relating to the mass of monolith processed, irrespective of metal content. For this example US$1.60 per pound (lb) monolith was used.

Refining charges may take the form of a cost per unit of metal contained, &/or a “paid metal” toll. Typically, paid metal is in the region of
• Pt – 90%
• Pd – 90%
• Rh – 75%

Rhodium is technically more difficult and expensive to extract, hence the lower figure.

All of the minor costs (decanning, G&A, logistics, sampling etc) are considered to be 5% of the in-situ value.

After these deductions, one effectively arrives at a “Net Smelter Return”, which may be considered an expected cash value of the cat-in-hand, compared with the in-situ value in Fig. 1. (US$ used for convenience as currency of metal price quotes. Current USD to GBP = 1.54).

As seen in Figure 2, this represents an average reduction 19 % (between 12% and 48% depending on cat model), and the vast majority (10th percentile) should be expected to see a reduction of between 15% and 48% of the contained metal value. Over and above all of this, each stage in the supply chain needs its own margin, and after two, three or more middlemen the value of cats will be reduced even more.
Join us for upcoming posts where we consider new ways for extracting maximum value for your scrap catalytic converters.