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.
Table 1. The difference between contained PGM value and a likely cash value, post-processing of scrap catalytic converters.
Fig. 1 Scrap catalytic converters’ in-situ metal value (blue) as compared to an estimated expected value (red)
Figure 2. Percentage reduction between the in-situ and expected values of metals recovered from scrap catalytic converters.
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)
• 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.