NAVIGATING THE FLUX : AUTOMOTIVE SCRAP CATALYST RECYCLING IN 2025

POSTED BY MAXIME LE BRETON

As we're entering in 2025, the platinum group metals (PGMs) market continues to navigate through periods of volatility similar to the early 2000s. This trend is evident from the recent cooling of the market after the peaks of 2021 and 2022, where average values of catalytic converters have halved. The market's current state sees recyclers holding onto converters amidst escalating thefts, making stockpiling an increasingly precarious strategy.

The outlook for 2025 suggests mixed signals for the PGM market, with dynamics reminiscent of past cycles, such as those seen in 2008 when platinum and rhodium prices crashed after reaching all-time highs. Current analyses, including Johnson Matthey’s 2024 PGM Market Report, forecast a significant platinum supply shortfall, the most considerable in a decade, despite a stabilization in Russian shipments and efforts in South Africa to process platinum stockpiles. However, palladium and rhodium face narrowing deficits as automotive demands decline due to a slowdown in global gasoline car production and manufacturers reducing PGM content to cut costs.

Moreover, recycling activities, especially in China, are ramping up, supported by government trade-in programs that stabilize secondary supplies of palladium and rhodium. This is in line with the broader trend of increasing PGM recycling rates expected to continue into 2025, improving by 9% year-over-year, driven by technological advances and heightened industrial applications of platinum in sectors like electronics and chemicals.

For those in the recycling business, adopting a long-term, strategic approach remains crucial. This involves regular selling of converters to manage market fluctuations and partnering with reputable processors to handle older inventories. This strategy not only mitigates risks but also leverages periods of price rebounds effectively.

Looking forward, the role of platinum in the hydrogen economy and stringent global NOx emission regulations will likely boost rhodium demand. Despite slower growth in electric vehicle (EV) adoption than anticipated, the sustained preference for gasoline and hybrid vehicles ensures a steady demand for catalytic converters. This continued need underscores the ongoing relevance of converter recycling operations well into the future of increasingly electrified transport.

The PGM market, though unpredictable, offers opportunities for those ready to navigate its complexities with informed, deliberate strategies. Whether holding, folding, or selling, the essence lies in acting with informed intent rather than reacting to speculative pressures. This approach will not only safeguard investments but also position recycling operations for success in a transitioning automotive landscape.