How Catalytic Converter Scrap Prices Are Calculated

MONTREAL (Scrap Monster): Catalytic converter prices can appear opaque because buyers do not all use the same settlement method.

At the simplest level, the market is trying to estimate the recoverable value of platinum-group metals in the catalyst and then account for processing, recovery and commercial terms.

Method 1: Unit Pricing

Under unit pricing, the buyer identifies each converter by serial number, part family or category and offers a fixed price per unit.

This approach is common for smaller lots, repair shops, dismantlers and recognizable OEM units because it is fast and easy to understand.

The buyer's database does the analytical work in advance. The seller is effectively accepting the buyer's historical or modeled estimate of the recoverable value for that converter family.

Key variables include:

• correct identification;
• OEM or aftermarket status;
• condition and completeness;
• current PGM market assumptions;
• buyer's expected recovery and margin.

Method 2: Assay-Based Settlement

For larger or mixed lots, a buyer or processor may decan the converters, mill the catalyst material into a more uniform powder, take representative samples and analyze those samples for platinum, palladium and rhodium.

The measured PGM content becomes the basis for settlement under pre-agreed commercial terms.

A simplified commercial framework looks like this:

Measured PGM content × agreed metal price basis × agreed payable/recovery terms − applicable processing, treatment, refining, freight or other contractual charges = settlement.

That is a conceptual framework, not a universal formula. Contracts differ by processor and lot.

Why Spot Metal Prices Do Not Equal the CAT Quote

A catalytic converter contains catalyst-coated substrate, steel or alloy housing, pipes and other materials. The listed spot price of platinum, palladium or rhodium is therefore not the price of the entire converter.

The converter also does not contain equal quantities of all three metals.

For an individual unit, the buyer must first estimate or measure how much of each PGM is recoverable. Only then can the metal-price basis be applied.

Why Sampling Matters in Assay Pricing

Assay settlement depends on the sample representing the entire lot.

Spent catalyst material is heterogeneous before preparation. Decanning, crushing, milling and blending are used to create a more homogeneous material from which representative samples can be taken.

Research on spent catalyst recycling consistently identifies sample preparation, homogenization and analysis as critical steps because an unrepresentative sample can distort the estimated PGM content of the whole lot.

What Can Be Deducted From Gross Metal Value

Commercial contracts vary, but sellers may encounter terms related to:

• processing or treatment;
• refining;
• sampling and assay;
• metal recovery or payable percentage;
• freight;
• minimum-lot charges;
• price-fixing date or averaging period;
• financing or payment timing.

Those terms should be agreed before material is processed whenever possible.

How to Compare Two Buyer Offers

Do not compare only the headline number.

Ask:

1. Is the offer per unit or assay based?
2. Who controls identification or sampling?
3. Which PGM price date or averaging period is used?
4. What recovery or payable percentage applies?
5. What charges can be deducted?
6. When is ownership transferred?
7. When and how is payment made?
8. What happens if the lot is disputed?

Final Takeaway

To evaluate a catalytic-converter quote, first understand the settlement basis. Unit pricing depends heavily on identification; assay pricing depends heavily on preparation, sampling, analysis and contract terms. Both ultimately connect back to recoverable PGM value.