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.