How Spent Catalytic Converters are Valued?

One of the most frequently asked questions by spent catalytic converters sellers is: how does a catalytic converter recycling company value the scrap materials it receives from them and other suppliers (like scrapyards and auto mechanic shops) and know what price would be a fair market price to pay.

Every company has its own unique way to work out the value. As one of Asia’s leading processors of spent catalytic converters, we undertake the entire sampling process in-house, from purchase, collection, decanning and processing to analysis before sending the ceramic powder to the refineries. This allows us to reduce material wastage during transportation, shorten processing time and optimise cost savings. Plus, having our own in-house ICP and XRF analysis capability means that we can quickly determine the exact quantity of palladium, platinum and rhodium in each piece of catalytic converters. With the assay result, we can provide accurate per piece grading and hedge our customers’ Platinum Group Metals (PGM) material to protect them from losses when prices fall and better manage our own risk and liquidity. This is especially important in a depressed market like now.

Our Price “Formula”

To be honest, the price of each spent catalytic converter is not valued on the PGM amount and current market prices alone. This is how we determined the price of each autocat model on our catalogue:

[PGM Quantity x Current PGM Price Quoted by Refinery] – [Logistics + Processing + Refining + Financing Costs]

  1. PGM Quantity
    We can accurately assay the amount of palladium, platinum and rhodium for each type of converter. We will then upload the photo along with its serial number and the exact content of PGM to our database. That’s why we always ask for the serial numbers at the start of every customer enquiry
  2. PGM Market Price Quoted by Refinery
    This will be the price of Platinum, Palladium and Rhodium on the day the enquiry is made. Although the prices may not be the same as what you see on what your Kitco app, they will be rather close. If there’s a time lapse between enquiry and purchase, adjustments can be made so both parties get a fair deal.
  3. Logistics
    Third parties cost incurred for packaging and transportation of the materials to our sampling facility. To be fair, we have to add this into the price consideration too.
  4. Processing Costs
    We also have to factor in the cost of labour for processing the whole converters into finely grounded, homogeneous ash, which is required for accurate assaying.
  5. Refining Costs
    Fees charged by the refinery for the final extraction of the PGM from the processed converter ash.
  6. Financial Costs
    These are financial fees incurred on pre-payments to sellers to ease their cash flow. Additional financial costs also include fees incurred in the trading of the refined PGMs for toll refining customers but these are separate and not included into the price of a converter.

Since the prices we quote are very close to current PGM market prices (our price is based on what the refinery quotes us), they do reflect the true value on your scrap converters at the time of the transaction – lower when PGM prices are low, and higher when PGM prices are high.

Other Important Factors to Consider

Besides price, some other (equally important) factors to consider are payment terms and the collector’s track record.

  1. Do some background checks on your buyer to lower your risks of dealing with someone unscrupulous. If you have friends who have been in the PGM recycling industry longer than you have, ask them regarding the buyer’s reputation. In a niche industry like ours, it is very likely that they have information to share with you.
  2. Work with a consistent and reliable buyer, who will buy from you regardless of where the market is heading. This is more important than going with the highest offer when the market is frothy because when prices fall, you will be left holding your scraps for quite some time.
  3. Price shouldn’t be your only consideration. Really. A trusted buyer would be able to help you mitigate risks and maximise your profit in any market condition. The guy who pays you impossibly high price will not.

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