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.