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The Evolution of “The Price List”

By Yannick Boudreau and Cliff Hope, PMR Catalytic Converter Recycling Inc.


Catalytic converters were first introduced to the North America automotive sector in 1973.  Wide spread use of converters in automobiles didn’t come into existence until the early the 80’s.  It took roughly another decade before people realized that catalytic converters contained precious metals and had a significant recycling value.  In the mid to late 80s the “Converter Price List” was born. The first lists only had 2 categories of converters, “Beads” and “Honeycomb.”  There have been a lot of changes since those pioneering days of converter recycling.  This article will take you through the history of the, “Converter Price List” right up to how converters are priced in today’s highly competitive 2017 market.


The automotive recycling industry generally knew very little about recycling auto catalyst in the early 90’s. During this time many converters were sent to the shredder instead of being recycled because very few scrappers understood the recycled value of them.  Back in the day converters were categorized as either “Beads” or “Honeycomb” and prices ranged between $2 and $5. In those early days those who were recycling converters made a lot of money as the average value of a converter was 14$ to 17$ per can.  150% plus profit made for a good living. 


As recyclers caught on to the value, “Honeycomb” was separated into two categories: “Import” and “Domestic”. This now made for three categories in the mid 1990’s.  The change came as catalytic converter buyers wanted to be more competitive and precise in their buying.  However; analyzing the different types of material was very labor intensive, time consuming and expensive.  There were very few laboratories that could accurately give feedback.  As time progressed, along with strengthening environmental standards, the average value of recycled converters increased dramatically, due to higher loading of precious metals.  In addition the price of platinum, palladium and rhodium sky rocketed in the late 90’s and early part of the 21st century.  The root cause of the increase can be accredited to challenged supply and increasing demand for this precious metal group.


As the word got out that there was money in converters, core buyers began to create their own price lists based on information that was highly guarded by catalytic converter refineries.  As more and more buyers came into the market place they needed creative ways to earn business from automotive recyclers and muffler shops.  During the late 90’s and early 00’s the “all-star” models were born.  You may remember seeing these names on price lists: Big GM, Spoon, Stop Sign, Kidney, and so on.  The “Price Lists” with the “all-star” models were the only way converter buyers were judged in the beginning.


During the early days of converter recycling, the catalyst industry was difficult to break into because information about individual piece values was highly guarded and controlled by refineries and not freely given out.  The lack of information and openness created a culture of secrecy when it came to converters.  Nobody, buyers and sellers included wanted to reveal who they were dealing with or where their information came from for fear of not getting the best price on either end.  Fortunes were made and lost depending on the quality of the information that was the basis of most price lists.  As true as this was in the beginning it is equally important today. The quality of information highly impacts the profitability of a converter core buying business. 


The price list went from 3 categories to 10 in no time and expanded even further by the close of the 20th century.  It is difficult to keep information suppressed and as it leaked out price lists started to include close to 20 models or categories; some of which included: GM, Domestic, Foreign, Beads, Chrysler, and Aftermarkets. Each region in North America had it’s own localized version and interesting names for different categories of converters like the Fish, Straight Edge, Squid, Hot Dog and too many more to list. 

 

Having more categories on a price list allowed converter buyers to grade the material according to their own standards and “all stars” were used even more as leverage and marketing tools. For example, a core buyer may have a list that showed $10 more on a “Big GM,” however, he would insert his own special category on his price list that he could down grade unfamiliar converters for much less money to ensure his profits on his exaggerated value on the “Big GM.”  It is hard to believe that in today’s information rich converter recycling industry this game is still being played, but it is.


Entering into the 21st century, technological advances made information easier to access, and as a result information spread rapidly.  Price lists began to show up on the Internet, and can still be found online today, whereas in the past, they were very difficult to obtain. Adapting to this change, companies began to become a bit more liberal with information and increased the number of categories their lists contained.  Instead of only containing those 10 basic categories, “Price Lists,” now included 3 and 4 times as many categories and became more and more detailed or for the average scrap yard owner more and more confusing.  Converter recycling is complex to begin with.  In an industry full of secrets and tricks many auto recyclers have developed distrust towards anyone purchasing converters.  No one could put their finger on it exactly, but always had the feeling of getting ripped off, true or not.


The progressive converter refiners that adapted to the information age began to offer pricing to big suppliers contained in on line databases.  Converter refineries began to record serial numbers found on converters and developed these databases so they could adapt to the price of precious metals in the market.  This had a great impact on the price list.  The first lists depicting serial number pricing were presented as an excel file and searching for each serial number was very tedious and challenging considering not all serial numbers were visible on the converters and the lists were incomplete at best.  


After the first decade of internet in the 21st century the price list expended even further to contain pages of numbers along with categories that had 50 or 60 divisions.  Purchasing converters by serial number is a more accurate purchasing method, yet at the same time, this practice is very cumbersome, time consuming and still incomplete at best because more often than not a serial number can’t be found. Furthermore, converter buyers are forced to print these lists every week with an updated metal price and it’s like buying from something the size of an old New York City telephone book.  If they can’t find a number in the list they grade the converter by category and make sure it is done conservatively.  It is difficult to make any sort of profit if a buyer is purchasing tight by the number and being aggressive with grading. 


Although it is true; buying by number, was proven to be more accurate, sometimes it resulted in lower prices than general grading category averages. For instance, a GM Category is a grouping of individual GM catalyst that when combined created an average price. For example, a GM Category consisted of individual GM converters with refined final values of; $75, $85, $87,  $90, $92, $94, and $102, and gave an average of $90. However; if grading a particular GM converter by serial number, this average is no longer applicable especially if all the higher value pieces are removed from the mix.


Essentially, this model of pricing was bittersweet, because although it gave seller more accurate information, it also could detract from the final price they were getting for a particular converter. Furthermore, buyers will not take a risk with an unknown converter without a serial number, and will therefore pay for it according to its lowest category.  So even though converter buyers increased their pricing accuracy by using the number/ grading system they still needed to be careful or let’s say conservative in their purchasing to ensure profitability.


In the last 5 years with wide spread use of smart phones and more reliable wireless networks, the leaders in the converter recycling business offer their suppliers access to large databases of converters organized by serial number, manufacturer and purchase category from hand held devices.   The advantage here is you can find pricing without referring to the “NYC phone book.”  This is creating even more categories within price lists once again.  To the small scrap yard or muffler shop things are even more confusing because now with so much information it is difficult to know who to trust when being quoted a price on any given converter. 


To wrap up the last 35 years of the “Converter Price List,” it would seem that with more and ever changing information things are even more difficult to figure out than ever.  The good news is that we are quickly approaching the death of the “Price List.”  More and more converter refiners are making the minimum requirements for toll refining smaller and smaller.  It used to be that refineries would only accept 2000 lbs loads of ceramic catalyst or roughly 1000 converters.  That has dropped in many cases to 500 converters (1000 lbs of ceramic).  There are some mavericks out there like PMR that offer toll refining on 100 converters or 250 lbs of ceramic.  Further it used to take upwards of 60 to 90 days to get toll refining results.  That can now be offered in less than 2 business weeks.  What does the future hold?  Refined results on 10 converters in less than 24 hours?  Technology is making it possible.  That day is just around the corner.

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