Catalytic converters are a critical piece of equipment from an environmental perspective and a requirement for gasoline-powered cars and light trucks. Regulation certainly has a role in any catalytic converter price too. Those facts ensure a steady demand for the devices. The supply of key metals (platinum, palladium, and rhodium) is limited and they all have other important uses. Finally, production and testing can be pricey. All of these factors mean that an affordable catalytic converter may never exist. Supply and demand relative to platinum group metals (PGMs) may be the single most important element.
Supply and Demand
As with just about any product or service, if the demand is high and the supply is limited, the cost will be relatively high. The same metals that a catalytic converter uses also have other in-demand uses. Platinum shows up in some high-end jewelry, in electrodes, and the glass blowing industry. Palladium also has numerous specialized applications in electronics, dentistry, medicine, jewelry, and fuel cells. Rhodium’s main use is in catalytic converters where it helps turn nitrogen oxides into oxygen, nitrogen, and carbon dioxide. Some rhodium ends up in jewelry or glass.
Annual global production is low, compared with demand, as you can see in these recent figures:
·a few hundred tons per year of platinum
·200 tons of palladium
·30 or so tons of rhodium
Regulation may also play a role since environmental regulations require catalytic converters on cars and light trucks. An affordable catalytic converter may never exist for these reasons. The platinum group metals (PGMs) are probably the single biggest factor in a catalytic converter price.
The High Value of PGMs
The competing demands and the limited annual production ensure high competition for all available PGMs. This is why the prices tend to hover between $900 to $1,000 per ounce for platinum and $1900 to $2,000 for palladium. Rhodium is a clear cost leader, selling for over $14,000 per ounce. Rhodium producers, and there are only a few, might be rationing their supply to keep the price high.
High production standards make ensure that catalytic converter prices stay high, even if PGM prices are low. This is why a catalytic converter with a quarter ounce of PGMs inside may be worth a few hundred dollars to a recycler. This is only one reason for their high price though. Supply chain issues have temporarily raised costs.
If you have one or a hundred old catalytic converters to sell, Belanger’s Group Catalyst app can speed up the process.
Mining and Manufacturing Bottlenecks
COVID-19 disrupted global supply chains in a variety of ways. Mining and auto parts are no exceptions. Mines that produce PGMs had to slow down or close until their respective nations got COVID under control. Factories closed or cut back operations for the same reason. Shipping was disrupted too. Things are sorting themselves out in mid-2022 but that doesn’t mean prices will drop far or fast. Demand for catalytic converters and the key elements they used did not slow down. Those facts have unsurprisingly caused palladium, platinum, and rhodium prices to spike. The high standards that government regulations require have made manufacturing more costly.
High Production Standards
On a related note, it takes considerable technical expertise to design and make catalytic converters. Employees with the necessary qualifications tend to cost extra. Tougher quality control standards require better materials, which adds to the cost of each part. Internal testing costs money as well.
Finally, manufacturing to comply with the toughest air pollution standard also raises costs. Governments are pressuring carmakers to produce “greener” cars, and better catalytic converters are vitally important here. The more effective the converter must be the higher the construction quality, and the higher the cost per unit. Increasing the converter’s effectiveness means using more PGMs, which raises the manufacturer’s cost.
Pollution Control Regulations
Many converter makers use the tough standard set by the California Air Resources Board to build their products. This means the parts meet a standard higher than what the federal government requires. Not surprisingly, it costs money to meet that standard. Testing and certification also cost money, making CARB-compliant parts more expensive.
If you need a replacement catalytic converter, you can save a little money by getting a model that complies with federal EPA standards, versus tougher CARB standards. That assumes your state follows the lower standard. This is the only affordable catalytic converter tip there is.
Find an Old Catalytic Converter Price and Sell with Confidence
A variety of factors contribute to setting a catalytic converter price. Supply chain issues, supply and demand for metals, and government regulation all add to costs. PGMs are rare and valuable, so there is competition from other industries. This is why catalytic converter recycling is a big business now. If you have some to sell, why not streamline the process with Belanger’s Group Catalyst app. It helps you price your converters and keep an inventory.
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