Why Has 2022 Been Such a Hot Year for Catalytic Converter Recycling?

The past few years have been good years for companies that sell catalytic converter scrap or the metals they contain. The main reason is easy enough to understand. Demand for platinum group metals (PGMs) has outstripped supply for several years. This did not change in 2021/early 2022. Since demand outstripped supply in early 2022, demand for scrap catalytic converters was strong, at least in the beginning of the year. Demand for the precious metals they contain was robust for 2021 and into 2022. How did the demand for PGMs outstrip the supply and how did recyclers take up the slack? If you know a few things about PGM mining and PGM markets, the answer is easy.

Supply and Demand in PGMs

Mines that produce platinum, palladium, and rhodium have not been able to supply enough of those metals to meet global demand. This situation may be resolving itself, but it created a big demand for scrap catalytic converters. Mining capacity increases slowly. Vast numbers of old catalytic converters and other sources of PGMs existed. Companies looked to the recycled metals market to get the platinum, palladium, and rhodium they needed. Entrepreneurs started collecting valuable parts and extracting those valuable metals. Because recovering metal from those parts is much cheaper than mining new metals, a booming market developed. That boom lasted well into 2022.

Like most any commodity, supply and demand determine how much a catalytic converter costs. The single most important component of the price is the cost of the precious metals the converters rely on. Catalytic converters contain small amounts of valuable platinum group metals- platinum, palladium, and rhodium. The amount varies between about seven and 16 grams depending on the model. Hybrid vehicles need a bit more PGM content. Older converter models also tended to have more.

If you have five catalytic converters with 5 grams of platinum each, you have an ounce of platinum. If you have 500 catalytic converters, you may have two kilograms (or almost five pounds) of platinum and a similar amount of palladium. That metal is super valuable thanks to the global demand and global shortages.

Global Demand for Metals

The PGM market is global because companies around the world need these metals for a variety of products. The automotive industry just happens to be the largest customer for them. Vehicle emission controls use the largest share of platinum mined each year, for example.

Other industries also need small, but significant quantities of platinum group metals. Rhodium is also used in jewelry, electrical contacts, and neutron flux detection, and as a catalyst in other processes. Platinum is also used in jewelry as well as being used in wires, electrodes, magnets, and some cancer drugs. Palladium is not as widely used in industry, but you can find it used in electronics and fuel cells. Because worldwide demand for PGMs has risen faster than supply over the past few years, recycling metals from existing sources have become more popular.

The Secondary Market for Catalytic Converters

PGMs make scrap catalytic converters valuable things to buy. This secondary market is well-served by numerous scrap yards, recyclers, and smelters. A few of the recyclers have even launched apps for people who have old parts to sell. Group Catalyst, by Belanger is one example of an iOS and Android app that makes it easy to get prices and create an inventory so you can sell a catalytic converter or a collection of them.

Catalytic converters also contain aluminum, chromium, titanium, and steel. Prices for those metals vary as well. But, since an ounce of palladium can be worth more than a ton of iron ore, PGM price increases have a disproportionate impact on converter prices. Of course, the scrap value of all these metals fluctuates.

High demand meant more companies recycled and more car owners and auto shop owners wanted to sell their old catalytic converters. Many of those old converters end up as new converters, but most of the valuable metals end up being used elsewhere. Manufacturers take the metals and turn them into a variety of things. Recycled steel is always in demand by various industries. The same is true for chromium and titanium, both of which converters tend to have in lesser amounts.

Sell a Catalytic Converter Stockpile Now

The market for old catalytic converters is still strong and should remain that way while demand for PGMs is greater than the supply. The wide variety of uses for these metals and high global demand have made recycling an attractive option compared to buying newly mined metals. Belanger buys converters and decans them. They can also hedge the PGM components on behalf of customers. Their Group Catalyst app makes it relatively easy to price your inventory and create a record of what you have.