WHY NOW IS A GREAT TIME TO SELL SCRAP CATALYTIC CONVERTERS AMID CHANGING PGM PRICES
POSTED BY PATY MAK
If you're currently holding a stockpile of scrap catalytic converters in anticipation of a rebound in precious metal prices, now may be a good time to reassess your strategy.
In 2025, the Platinum Group Metals (PGMs)—including palladium, rhodium, and platinum—are undergoing significant pricing adjustments. While values have declined compared to previous highs, many converters still retain substantial worth. For recyclers and scrap professionals, understanding what’s driving the market can help ensure timely, profitable decisions.
PGM Prices Are Shifting
Recent trends show a continued decline in key PGMs:
- Rhodium has fallen over 80% from its 2021 peak, now trading near $4,700/oz.
- Palladium has declined by more than 45% since early 2023.
- Platinum, although in a global supply deficit, has only seen modest price gains.
These changes reflect long-term market dynamics, not short-lived volatility. Understanding these trends is essential for businesses managing scrap converter inventory.
Risks of Holding Inventory Too Long
Holding scrap catalytic converters in hopes of a future price surge may expose businesses to unnecessary risks. Here are some of the key drivers behind today’s pricing:
Evolving Demand
The automotive industry is shifting rapidly. As electric vehicles (EVs) gain market share and hybrid systems improve, the long-term demand for palladium and rhodium in gasoline-powered vehicles is declining.
Rising Recycling Volumes
The number of catalytic converters entering the converter recycling industry continues to grow, increasing the supply of secondary PGMs and putting downward pressure on prices.
Automaker Inventory Liquidation
Some vehicle manufacturers have begun selling off their excess PGM inventories built up during high-demand periods, adding to the overall market supply.
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Why Selling Scrap Converters Now May Be Advantageous
Despite recent price declines, many converters—particularly older OEM units—retain strong value. Here’s why acting now could be the right call:
Preserve Current Value
Converters rich in rhodium or palladium still offer significant returns, and current pricing levels remain viable for profitable transactions.
Minimize Exposure to Further Declines
With no clear signal of a short-term recovery in rhodium or palladium markets, holding inventory could result in deeper losses.
Improve Liquidity
Selling now generates working capital that can be reinvested in operations, equipment, or fresh scrap inventory—helping your business stay competitive.
How to Maximize Returns in a Soft Market
To ensure you’re getting the most from your scrap converters, follow these best practices:
- Accurate Identification: Use XRF analyzers or trusted reference code catalogues to assess your material accurately.
- Sort Efficiently: Separate diesel from gasoline converters, and distinguish OEM from aftermarket types.
- Choose the Right Buyer: Work with partners who offer assay-based pricing or reliable catalog evaluations—not flat-rate offers.
- Stay Informed: Follow weekly market updates to recognize the right selling windows.
Planning for Unexpected Market Spikes
While the current outlook is subdued, market conditions can change quickly due to global events or supply disruptions. Here’s how to stay ready:
- Keep a Strategic Reserve: Holding onto a small number of high-value converters (especially those rich in platinum) can serve as a hedge.
- Track News from Key Mining Regions: Pay attention to geopolitical or operational developments in South Africa and Russia—two major PGM-producing areas.
- Maintain Flexible Relationships: Work with buyers who can respond quickly to market movements and offer updated pricing in real time.
While short-term spikes are possible, building a strategy around them is speculative. For most recyclers, selling the bulk of inventory now remains the more stable approach.
Final Conclusions: Timing Matters
The PGM market is evolving quickly, and timing your sale can have a major impact on your return. Selling scrap catalytic converters now, while values remain solid and demand still exists, can help you:
- Lock in favorable prices
- Free up valuable working capital
- Reduce exposure to a weakening market