Recycling Product News Logo

Understanding the changing catalytic converter landscape - Part II

Top Ten Converter Myths and Misconceptions

PMR's photo-grading application being utilized to obtain converter values.
PMR's photo-grading application being utilized to obtain converter values.

Company info

4640 Boulevard de la Grande-Allée
Boisbriand, QC
CA, J7H 1S7


Read more

Over the years there have been many myths, misconceptions and legends in the converter business, which has translated into a problem for scrapyard owners and managers around the world. Who can be trusted with highly valuable cores? Buyers of all sorts have been knocking down doors for years offering "the best price" or "most money" for converters. With so many buyers out there, how can scrapyards possibly separate the wheat from the chaff? This article will give an insider's perspective on the top 10 common misconceptions in the catalytic converter recycling business, and how to actually get the most dollars for your cats.

In no particular order, as it would be very difficult to quantify the following myths and misconceptions, I will try to shine some light on the catalytic converter recycling process from the inside out. To qualify how I came up with this top 10 list, I have over the years spoken with hundreds of scrapyard owners and managers who have (with interesting and sometimes very colourful language) made some version of the following ten statements.

1.) "Getting multiple buyers to bid on my stock will get the best price."
In theory this works well, as there are many different types of buyers out there and they will most definitely have conflicting information regarding converters. The conflict is present because each buyer will be selling the converters to different companies who in turn educate the buyers on the value of the material differently. Prices will vary further depending on how many times the converters change hands on their way to being processed and refined.

There are other factors to consider here as well. Has the buyer that won the bid inflated his pricing so he will not have to bid the next time? Is the mix of converters similar each month? (Bear in mind that it is next to impossible to make two identical loads of converters, because no converter lives the same life.) Are the core buyers in your area colluding to swap the winning bid back and forth every other load? How many serial numbers can each buyer actually see on your converters? What percentage of the load is being purchased by grade rather than number?

There's a lot to consider here, and the answers to these questions must keep many scrapyard owners and managers up at night. Truth be told, unless you are already dealing with a converter processor/refinery, the core buyer at your doorstep is going to sell the material up the chain and each hand will take a portion of the profit. There is nothing unusual about this, as core buyers are trying to make a living and survive while also (for the most part) trying to give you the best price for your converters. 

In the end, the bidding war idea looks like it should be more profitable, but ultimately if converters are going to change hands, there is still money being left on the table that yard owners are missing out on. 

It should be noted however, that there have been situations where yard owners and managers have received more money from core buyers for some of their converters than what they are actually worth after being refined and processed. Buyers will either overpay due to inaccurate pricing information or as a strategy to win a bid. Needless to say, these core buyers/companies have either gone out of business or will eventually no longer be able to sustain themselves before going under. Buyers will not be able to continuously overpay for material and sustain their operations - the two cannot coincide. 

2.) "Selling by number gets more dollars."
Many converter companies today are investing a lot of time and money into developing databases that contain the values of converters by serial number. Some are more advanced than others and are able to offer these tools online, while others are still sending out a price list every week. These lists can contain hundreds of different numbers with values.

There are three very clear reasons why this is not the most profitable way to sell material.

 First, when a converter company pays for a converter by number they have taken one example of that converter (or sometimes several of the same number/converter) and analyzed that specific converter for its value. In order to be profitable they need to build in their profit margin to the value of the published number. Often these companies will allow a few rare numbers to be published at the top end, with next to no profit, to look like they are giving the seller more. In reality these numbers will represent less than one percent of any given load. The company will surely make up the difference in bigger margin converters.

Second, converters by nature are dirty, rusty things that are being harvested at the end of a vehicle's life. Even the most experienced buyer with the best information in the world will only be able to find, at best, 60 percent of the codes, even on converters that are in the most pristine condition. Once you factor in cars that are driven in regions where weather further impacts the condition and erosion of the converter, that 60 percent average could drop drastically to less than 25 percent. As a result, core buyers cannot stay in business if they are purchasing a high percentage of material at a low margin of return. They also cannot be aggressive in pricing with converters they are not familiar with. Essentially, core buyers need to ensure there are gains to be made on their end, which is done by taking a cut of the scrapyard owners converter profits. 

Third, and perhaps most important of all, the buyer in your yard is still going to have to resell the material to a processor/refinery to make a profit. The change of hands ultimately means the scrapyard owner is at least one, if not two, steps away from getting the most value out of converters. 

A box full of converters delivered to PMR's corporate facility.

3.) "I can evaluate a converter buyer by the price list he sends me."
A price list is only as good as the buyer using it. Most yard owners and even managers can identify a large "bread loaf" from an "aftermarket." However, this is usually where the knowledge stops. There are so many converters out there that it is impossible to know every grade. Even exceptionally educated and knowledgeable buyers run across converters they have never seen before. 

If you are simply looking at price lists and allowing the one with the highest pricing for your cats, there is a lot of money being left on the table. It is just human nature to grade material to the buyers' advantage. There are so many converters that have a much higher value than the category they are placed in - leaving the "great" looking price list flawed and inaccurate in value. 

4.) "Cutting my own converters will get me more money."
Here is a theory that, once again, looks great on paper. Contrary to popular belief, decanning converters is no easy task and making sure all precious metal content within the converter is retained and captured requires cutting-edge technology and machinery. With this cutting-edge technology comes high capital investment in equipment, health and safety education and other issues, as well as the salaries needed to employ individuals operating the machinery. And we cannot forget the pressure to produce the minimum material requirement of 2,000 pounds of ceramic to maintain regular business with a smelter. 

Regardless, companies that begin cutting converters on their own will often make marginally more money than they do selling to core buyers, as most of the subjectivity is taken out of the equation. However: even some of the best equipment on the market today for cutting and collecting valuable dust is still not as efficient as using companies that specialize in this service.

Usually, when all the key factors are taken into consideration, most scrap-yard owners and core buyers leave the cutting to the specialists and spend time harvesting more converters. 

5.) "I should follow the price of Platinum to know when it is best to sell my converters."
This is one of my favourites. If I had an ounce of platinum for every time I have heard this, I wouldn't be writing this article. Either way, many people in the scrap industry do not realize that there are three precious metals recovered in auto catalyst - and gold is not one of them. 

The three rare earth metals are platinum (Pt), palladium (Pd), and rhodium (Rh). Every different gasoline-based converter will have a different loading combination of all three metals. Auto manufacturers will load converters with these metals based on: the environmental requirement of the state the car is being delivered to; the combination of precious metals that will most efficiently convert toxic gas emissions to less harmful fumes released into the environment; and lastly, the load that will do the job for the least amount of investment.

The last factor is perhaps the most relevant to the creation of this misconception. Fifteen years ago, platinum actually did play a larger role in the value of a converter. However, in the years to follow, carmakers began to load converters more heavily with palladium due to it being less expensive. 

Today, where platinum used to be the bigger load, palladium now counts for more than three ounces, compared to one ounce of platinum, making palladium the metal to pay most attention to. Bear in mind that the typically more expensive platinum comes in at a close second. Rhodium only makes up about one eighth of the precious metal recovered in converters. 

6.) "Smelting converters is the end of the line for converter refining."
This is one of the most common misconceptions in the industry. Smelting is one step closer to the end of the line for recycled ceramic converters, but is in no way the final procedure. What is even less known or understood is that no one gets paid for what comes out of a smelter.

A smelter requires thousands and thousands of pounds of material to be constantly added to the mix. It is impossible to tell whose metal is whose once the smelting process is started. Therefore, the only way ceramic auto catalyst is measured for value is pre-furnace, by laboratory analysis or assay. It is this assay that determines the recovery amounts of precious metals.

What comes out of a smelter is a combination of the three precious metals and is referred to as sponge. It really doesn't look like much of anything as it cools into ingots that must be chemically refined to be brought back to the more pure rare earth element state. There are very few companies that make the chemical transformation, and once again, no one is getting paid for their converters in this way.

The sorting table where trash and metal pieces are removed from ceramic substrate before it goes to the crusher.

7.) "You are only a toll refiner if you have a smelter."
It is possible to be operating as a toll refiner and not own a furnace. In fact it can actually be more profitable to be a toll refiner and broker the furnace work. This is only possible if the toll refiner has a functional and accurate sampling method and laboratory to do the assay work. 

As mentioned, the only way payment for a load of catalytic converters can be accurately defined is when the converters have been de-canned, the ceramic has been crushed and commingled and a sample of the load has been taken into the lab for testing. Toll refiners will then analyze representative samples by XRF (X-Ray fluorescence) and ICP (inductive coupled plasma) technology to determine the value of the total load from the average of the samples.

8.) "A smelter can pay more." 
Based on the evidence stated above, a smelter cannot pay more than the value determined by an accurate assay of auto catalyst, because the only way to pay for ceramic auto catalyst is by assay pre-smelting. What comes out of a furnace is the collective metal from thousands of tonnes of auto catalyst. It is not possible to separate one lot from the next at this stage of the process.

The only accurate method to determine the precious metal content of any given load of converters is at the pre-smelter stage, by sampling and assaying the load. Smelter or not, a lab assay of the ceramic material is all that counts.

For the sake of interest, what happens after ceramic is smelted is the real refining process. The metals are subjected to chemical treatment to separate them into their more pure state of Pt, Pd and Rh. Even after all this, the metals are not in the form of pure bars. Usually, at this stage the metal ounces produced are sent right back into automotive or industrial catalyst creation. Going to pure metal bars would take an additional heat treatment and would involve pouring into the bar itself.

9.) "A converter is worth X."
Most yard managers and owners have been trained to believe that certain converters are worth ‘X' amount. This information has been taught and instilled by their core buyers. 
The issue behind this logic is simple. Each and every converter (even identical units) live a different life; therefore, it is impossible to categorize any given converter to have a retained value of X because even two identical converters can have a range of results upon analysis. 

To illustrate this phenomenon, let's take a "Large Bread Loaf" converter as an example. Yard owners and managers have been trained not to accept a price less than $80 for any Large Bread Loaf when core buyers come to grade their units. 

In reality, analysis results can range considerably for this grade of converter. Results will depend on the life cycle of the given converter in question, what state it was originally delivered in, what brand engine block it was attached to, and more. The ‘X' value of a given converter is impossible to know exactly without individual analysis. 

In truth the value of a Large Bread Loaf can vary between $40 to $240. That is a pretty big spread. The average today is somewhere in the $80 range but that will also change with the price of precious metals. 

The only way to get the real value from any given converter is through toll refining.

10.) "Bigger Converters are worth more money."
Bigger is not always better. As mentioned throughout this article, every converter will retain different levels of platinum, palladium, and rhodium when it is analyzed and processed for recycling. 

The truth is that not all converters are built the same. Car manufacturers are using different precious metal loads in different combinations for each and every different engine block. Older cars will have larger converters with lower loads of precious metal, while more recent models can have a much smaller converter with a higher load that exceeds the value of its older counterpart. 

This does make things very confusing when trying to value a core. The best way to know is to work with a company that can provide an extensive database of converters depicting true current market pricing. 

I really hope that this list has given you some insight into the complex world of converter recycling. There are many ways to sell your converters. Essentially however, the converters you are selling will end up in a batch that is decanned, processed and assayed prior to being smelted, chemically refined and, in most cases, made into another converter.

The only real way to get the most for a valuable core is to work as close to the end of the line as possible. Companies that are offering toll-refining settlements are really where the buck stops. Find one that can offer you great service, information and terms, and you will have found a great home for your auto catalyst.  

This article was originally published in Recycling Product News, September 2017, Volume 25, Number 6.

Click here for Part I of Cliff Hope's "Understanding the Changing Catalytic Converter Landscape": Getting a handle on the true value of Recycled catalytic converters.

PMR converter shipment being stacked and prepared for processing.

More from ELV Recycling

Eriez UHF Eddy Current Separator helping Waukesha Iron & Metal recover metallic fines from ASR

Eriez introduced its Ultra High-Frequency (UHF) Eddy Current Separator in 2016 as a way for its auto shredding customers to generate significant additional revenue by recovering aluminum, copper and other nonferrous fines that had formerly been lost within the larger auto shredder residue (ASR) stream.

Time to rethink what can be accomplished with catalytic converter recycling data

In the automotive recycling world there is endless data produced and studied by companies large and small. Being able to make sense of that data has been the preoccupation of business owners, managers and the people behind the creation of data for many years. With respect to recycled auto catalyst data, the focus has primarily been on the average value per unit. For those who are serious about data tracking and catalytic converter profits however, it's time to rethink what is possible to accomplish with data.

Sierra Recycling and Demolition has built success at the scrapyard based on reliable equipment, advanced technology and solid culture

Shortly after World War II, Ben Sacco came to California and started Sierra Bag Company, servicing the agriculture industry. In the late fifties, Sierra Iron & Metal was born when he dedicated a portion of his operation to scrap metal collection. He then added a baler to process scrap, which he found while visiting his homeland of Italy. Sacco eventually became the official North and South American distributor for the baler manufacturer, starting Sierra International Machinery, while at the same time continuing to operate his scrapyard, Sierra Iron & Metal. About 10 years ago, the business was passed on to Ben Sacco's two sons, John and Philip Sr., both of whom have been lifelong employees and contributors to the business. The scrap recycling part of the Sacco family business today operates as Sierra Recycling and Demolition Inc., run by Phil Sacco, while Sierra International Machinery, the recycling equipment manufacturer and distributor, is run by John Sacco - both out of Bakersfield, California. 

The latest shear/baler/loggers provide scrap metal recyclers with the versatility needed to profit and grow

As a category of heavy-duty machine engineered specifically to provide scrap recyclers with the versatility to process heavy metal materials as well as light metals - creating logs, bales or sheared-to-length material, ready for efficient transportation to buyers - the growing popularity of shear/baler/loggers (SBLs) is not surprising. 

Demo of Cat material handler provides SA Recycling with opportunity to make the right equipment investment for feeder yards

SA Recycling operates over 70 scrap metal recycling yards in the U.S., including close to two dozen ferrous shredder operations. The company, started in Orange, California, has since grown as far north as Fresno, and east to Arizona and Texas. More recently, the company expanded to the U.S. southeast, into Alabama, Georgia and Tennessee. Originally, SA Recycling was Adams Steel; they merged with Sims about ten years ago to form "SA," which stands for Sims-Adams.

Voith SafeSet coupling retrofit solution for City Scrap & Salvage

City Scrap & Salvage, located in Akron, Ohio, has experience dealing with catastrophic failure of the driveline between the motor and rotor of an automotive shredder. The company says that when operating without torque overload protection, they had an unshreddable item enter their shredder, and with continued inertia cause serious damage and shredder shutdown.

Subscribe to our free newsletter

Get our newsletter

Learn more

With origins dating back over two decades, OverBuilt car crushers and baler/loggers remain an industry standard

Based in Huron, South Dakota, OverBuilt turned out their prototype Car Crusher in 1996. According to OverBuilt sales manager Steve Besch, their current design, which visitors saw at this year's ISRI 2018 on the Model 10 HS Car Crusher (right), originally arose from scrap dealers who approached company owners, father and son Dick and Scott Rink, with three requests: make car crushers easier to use, provide a larger opening to fit larger machinery or more cars, and make them run faster. 

Latest SEDA vehicle drainage system is helping keep Ontario’s Nicklin Auto Parts & Recyclers on top of a never-ending supply of ELVs

Nicklin Auto Parts & Recyclers has been serving southern Ontario since the late fifties. In the mid-nineties the company's 30-acre yard and building in Guelph was purchased by its current owner, Denis Krajcar (shown above), who says he started in the auto recycling business as a teenager. "I started working at Cambridge Auto Wreckers when I was 16, until I was about 25, when I bought this place," explains Krajcar.

Built to dismantle

Sure, you could dismantle four to five cars a day by hand. Or, you could process up to 70 a day with the raw power and delicate precision of the Kobelco SK210D multi-dismantling machine. This is what Texas Auto Salvage of San Antonio is currently doing. The company purchased its first SK210D in October, 2017 and quickly ordered a second unit one month later.

Recycling Equipment Canada and Iris-Mec launch visual component for vehicle depollution systems

The new end-of-life vehicle (ELV) processing regulations now in force in Ontario and coming to other provinces are having a significant impact on the automobile recycling sector. With increased depollution requirements, Recycling Equipment Canada (REC), based in Waterloo, Ontario, set out to find the safest, easiest-to-use, and highest-quality solution to enable its auto recycling customers to meet the new standards. REC focused its search on Europe, where similar regulations have been in place longer, and concluded that Iris-Mec equipment was the right choice. Since launching Iris-Mec in Canada in 2014, REC has sold many systems to used auto parts and scrap metal recycling customers. 

Richmond Steel Recycling: Auto Focus

Richmond Steel Recycling has been in business for over 45 years, with operations starting in the early 1970s. Today Richmond Steel Recycling has four locations in B.C., with feeder yards in Prince George, Fort St. John and Kamloops. At their main yard, located on Mitchell Island, on the Fraser River between Richmond and Vancouver, B.C., they operate the province's only large-scale auto shredder. 

​Inaugural Global Recycling Day is Sunday March 18

As part of a worldwide effort to promote the importance of recycling on the first-ever Global Recycling Day this Sunday, March 18, the Institute of Scrap Recycling Industries (ISRI) is calling on businesses, communities, policymakers, and individuals to increase their commitment to recycling and recognize scrap as an important resource. Recyclable materials are valuable commodities that play a pivotal role in environmental protection, energy conservation, and sustainability. 

​Bunting Magnetics Co. awarded patent for innovative magnetic circuit design used in its SSSC Stainless Steel Separation Conveyor

Bunting Magnetics Co., the leader in moving, removing and holding metal, and the inventor of stainless steel separation, has been awarded a U.S. patent for its ground-breaking magnetic circuit design incorporated in the Stainless Steel Separation Conveyor (SSSC). The SSSC Stainless Steel Separation Conveyor, launched at ISRI 2017, has delivered game-changing solutions to the recycling industry ever since. Field tests have proven it removes up to 94% of large fraction stainless steel.

The dangers of non-conforming batteries in the lead battery recycling process

Lead batteries continue to be a recycling success story in the United States, Canada and abroad. In fact, according to a National Recycling Rate Study commissioned by Battery Council International (BCI) in 2017, more than 99% of Lead batteries are recycled.  This is equivalent to about 12 billion pounds of lead batteries recycled in a four-year period.

ISRI calls China's final scrap import standards disappointing for recycling industry

In response to the publishing of the final Environmental Protection Control Standards for Imports of Solid Wastes as Raw Materials (GB 16487.2-13) - the quality standards for imported scrap by China's Ministry of Environmental Protection (MEP), the Institute of Scrap Recycling Industries (ISRI) has released the following statement:

Subscribe to our free magazine

Get Our Magazine

Paper or Digital delivered monthly to you

Subscribe or Renew Learn more

China's Proposed Contaminants Thresholds not in line with global standards, according to ISRI

In response to China's notification to the World Trade Organization (WTO) of its intent to adopt Environmental Protection Control Standards for Imported Solid Wastes as Raw Materials (GB 16487.2-13), the standards that set the allowable contaminants thresholds for scrap imports, the Institute of Scrap Recycling Industries (ISRI) released the following statement earlier this month.

​America Recycles Day Celebrates Recycling Industry's Innumerable Economic and Environmental Benefits

 (Washington, DC) - The Institute of Scrap Recycling Industries (ISRI), the Voice of the Recycling Industry, celebrates America Recycles Day November 15th, by applauding all individuals who make a strong effort to recycle as part of daily life, and encouraging all to learn more about recycling and the industry. America Recycles Day, a national initiative of Keep America Beautiful, takes place yearly on November 15 in an effort to promote and celebrate recycling in the U.S. 

Registration Open for ISRI’s 2018 Convention and Exposition

(Washington, DC)- Registration is open for the Institute of Scrap Recycling Industries' (ISRI) Annual Convention and Exposition. ISRI2018, the world's largest annual gathering of scrap recycling professionals, will be held April 14-19, at the Mandalay Bay Resort and Casino in Las Vegas. ISRI2018 is set to provide scrap recyclers from around the world with the educational and networking opportunities, product showcases, and industry news needed to maximize their time, dollars, and return on investment. 

​MSS Announces Next Generation of Metal Recovery Technology

Nashville, TN - MSS, Inc., the optical sorter division of CP Group, has introduced MetalMiner, the next generation of induction-based true all-metal detectors. MSS has designed and built induction metal sorters for over 40 years, and this latest iteration was designed specifically to handle auto shredder residue (ASR), electronic scrap, plastic flake and glass cullet applications. One of the most relevant new technical features of the MetalMiner is the patent pending MapLine algorithm. 

SICON Laser Sort introduced

Laser-induced breakdown spectroscopy (LIBS) is currently one of the most exciting developments within the scrap industry. Based on the chemical element analysis of each individual object passing through the sorter, the all-new SICON LASER SORT delivers a solution to tackle the growing demand for unmixed aluminum alloys and pure non-ferrous metals with special focus on aluminum recyclers, secondary aluminum and non-ferrous smelters.

Keeping up with the evolution of scrap

Sarnia, Ontario-based Trijan Industries is a family-run business that goes back 100 years and four generations in scrap metal. Doug Slipacoff, part of the latest generation and the current operations manager, says his great grandfather immigrated to Canada and eventually settled in Petrolia, Ontario during the oil boom era where he started collecting scrap metal from worksites using a horse, buggy and a wheelbarrow. Doug's father Lawry, Trijan's president, has now been in the scrap metal business for 44 years and has built Trijan into the company that it is today - one built on knowledge, efficient processes, the latest equipment and high-level customer service. 

​KOBELCO shows off latest demolition excavators and car demolisher

At CONEXPO-CON/AGG 2017 this past March KOBELCO Construction Machinery says they hosted their dealer network members along with thousands of attendees at their exhibit, where they displayed the company’s latest advancements, exclusive technologies, several new and specialty excavator models and configurations, including the the SK1000DLC large building demolition machine, and debut of the SK210D-10 Car Demolition Machine and SK350DLC-10 Building Demolition excavator.

Recycling industry returns to New Orleans for scrap sector’s largest gathering

The Institute of Scrap Recycling Industries (ISRI), the Voice of the Recycling Industr, will hold ISRI2017, the association’s annual convention and exposition April 22-27 at the Ernest N. Morial Convention Center in New Orleans. This annual event brings together thousands of scrap recycling professionals, industry experts, manufacturers, and consumers from all 50 states and more than 40 countries. There they will discuss the latest in the global scrap recycling business and evaluate the state-of-the-art equipment, products, and services used by the industry.

Subscribe to our free newsletter

Get our newsletter

Learn more

Mobile App launched, scrap database unveiled and specs updated

April 20, the Institute of Scrap Recycling Industries (ISRI) announced the release of an updated version of ISRI Mobile with enhanced communication features. Users of the iPhone and Android apps will now have the ability to receive customized notifications and more detailed alerts pertaining to the recycling industry.

New partnership between ELV Select and SEDA marks renewed vision for canadian end-of-life vehicle recycling market

Ontario-based end-of-life vehicle (ELV) recycling equipment manufacturer and distributor ELV Select has announced that they are now offering the ES2 Mobile Drainage Station, a first of its kind system for the North American market. In 2015, the company began a partnership with Austria-based auto recycling and drainage equipment specialist SEDA International, as the exclusive Canadian distributor. ELV Select designs and builds the ES2 container, for the entire North American market, while SEDA USA, SEDA’s subsidiary based out of Georgia, provides the ES2’s drainage technology and 10,000-pound vehicle ramp. 

Market forces and new policies signal change for ELV recyclers

The Canadian end-of-life vehicle (ELV) recycling sector is currently sailing into shifting winds and changing currents that will redefine the industry for years to come. Market forces and public policies that affect automakers upstream of ELV recycling businesses and that affect downstream used parts and recycled materials markets will have a profound effect on ELV recyclers.