Becky Berube, United Catalyst Corporation President discusses how you can make the most from catalytic converters.
What in the world is going on?
In my own life and business so much has changed in the past 30 years. I am not sure I ever envisioned Rhodium heading past $10,000 a troy ounce. Some analysts predict that the Rh shortage and lack of mining projects may push the price to double. Even with auto sales trending downward, emission standards worldwide are increasing. This means more precious metal loadings in autocatalyst. Palladium being the dominant metal being used. Rhodium being the best means to treat NOx emissions.
Are cat sales making your year? They should be
Maybe I sound a little ignorant when I ask if cat sales are making your year. I know that scrap catalytic converters are not your main product for sale. But when you look at the fact that some of you are producing $10,000 to a $1,000,000 a load that is not chump change anymore. With steel prices down this past year, you can’t afford not to look at the importance of your converter sales.
One Way – Assay
I will say it until I am blue in the face, assay-based selling with a process, a program, and a partner you can trust (and verify) is the only way to maximise the money you get for your cats with any certainty.
In life, there is more than one way to do most things. This is not true with converter recycling. There is a specific amount of precious metals in each converter. There is a cost to recycle it. There is a price for each metal that is sold. You’re either in the real game or you are not. You are either getting treated fairly or you are not.
Key Metrics are Everything
In converter recycling, the best recyclers know their numbers and partner with companies that educate. Knowing key metrics about your converter loads safeguards you against misleading data like a false average price. Key metrics like your average price per unit, the average price per pound or kg, and average weight per unit, can increase your bottom line.
Every recycler looks at his or her average converter price. It’s an easy metric to track but an even easier number to get wrong if you didn’t get an accurate whole-body count before you shipped. You would be surprised how many recyclers consider the average sales price as gospel, but do not take the time to count their load before selling it. Relying on your processor to count for you, could be costing you.
To avoid common pitfalls in converter recycling, we suggest the following actions:
- Know your count before you sell.
Train a key person to count and inspect the converters before you package them up. Teach him or her the difference between the ceramic and metallic (foil/wire) converters. And if you are selling on assay recovery, send in the empties if they have just a little catalyst in them. A good processor will cut those and add that material. Also, if it’s genuinely empty, you and the processor will both agree that it is.
- Become an educated seller.
Work with a company that believes in educating you about your loads. A good company will not hesitate to explain your invoice and how the numbers are derived. With selling on assay recovery, your results can be verified. That’s the beauty of the program. However, as with all science and commodity sales, we are taking something complex and simplifying it for ease. This lack of uniformity across companies that process and refine makes you an easy target for skimming weight, actual value, and YOUR profits.
- Audit your program.
Become a data junkie. Learn all the key metrics to avoid misleading data, like your average converter price, and track true sales. You will be amazed as you gain data points, how easy it is to get misled.
The 4 P’s of Converter Recycling Profitability
In recent articles, I have written that you need a Process, a Program, and a Partner you can trust, and you need to learn the Power of Education.
- A Process – You can sell on assay instead of selling by the piece. You will need to be paid on a sample and assay that are official, accurate, and verifiable.
- A Program – You need to be able to get money when you need it to run your business. Getting the most money from your converters shouldn’t mean you have to wait until you have a truckload or can hold out for 3 months to get paid. With most processors, you have payment choices like a partial early payment upon arrival, payment at the time of assay, or payment at the metal outturn date.
- A Partner – Selling on assay or recovery helps to eliminate that problem because there is a test result that can be considered the basis for the sale. However, even with this method, working with a partner you can trust cannot be overstated.
- The Power of Education – We take a complex process and try to make it understandable and easy to use. We know that once you learn about your converters and your yard/company profile, you will increase your profits, and no one will ever be able to take advantage of you again.
To learn more about selling converters on assay or to read other articles in this series, please email Becky at firstname.lastname@example.org
Becky Berube serves the recycling community as United Catalyst Corporation President, she writes a monthly educational column for the industry, serves as a member of the ARA Annual Convention Educational Programming Committee and ARA Peer Mentoring Program, and is Vice President of the International Precious Metals Institute.