Counting Converters By Material Type to Help You Understand Your Business
Published in Canadian Auto Recyclers 13#1 2019, Pages 88-89 – February 2019
Automotive and scrap metal recyclers want the best potential value for their recycled catalytic converters. But if you’re selling to a buyer who only purchases units by the piece, how can you ensure that you’re getting a fair price?
One way to ensure that your buyer is giving fair prices is to count your converters by material type. This gives you a clear understanding of your material, and if your buyer’s “can/unit average” pricing isn’t representative of your count, you can either negotiate to get a better price or find another buyer.
So, how should you count your converters? Let’s first explore the different material types and how identifying each type during a sale is important.
The 5 Converter Material Types
OEM, aftermarket, foil, DPF, and beads are the five types of converter material. OEM (Original Equipment Manufacturer) converters are the original units placed in the vehicle when it’s manufactured. Aftermarket units are converters that replace an OEM that's been damaged. DPF converters are fitted to diesel engine vehicles. Foil and bead converters are older material types used by different carmakers. While Chrysler went with biscuits, for example, other manufacturers like Ford and GM went with bead and foil.
If your current buyer isn’t identifying each type of material with you, chances are they don’t have honest prices to offer. An honest buyer will give you unit counts outlining each type of material and partial units. Less transparent buyers will combine material or count smaller units as 2 for 1 to achieve a more competitive average value.
Can There Be an Average Value for All Combined Materials?
In the processing industry, each of the different material types listed above are processed differently by a refiner, so how can your buyer give you an average value for the combined materials?
While it’s possible to arrive at an average price for all your units for one lot, it’s important to remember that none of your lots will have the same mixture of material type. As a recycler, you should be aware of the average value for each material type in your lots, not the combined average. That’s because it will alter the view of your month to month converter profits and won’t help you purchase end-of-life vehicles competitively.
What Does a Reliable Count Look Like?
An accurate count will give you a detailed report of all the converters leaving your yard. This report should indicate how many of each of the 5 material types you sold, including partial units.
When you deal with a refiner, they give you the total weight of the ceramic/wash coat that came from the lot and the average weight per unit. With this information, you get the actual value per unit based on the market price of platinum, palladium, and rhodium.
What Does This Information Do for You?
Having and keeping a proper count of all your catalyst material gives you an overview of the vehicles you process or the materials you buy. This way, you can easily monitor where you’re making profit, ensure the consistency of your returns, and track theft.
But you can be sure that not every buyer will give you an accurate count. Why? They need to make a profit out of your material as well, so they will provide competitive prices for the known units and lower prices for the lesser known converters. Only a professional processor can provide you with a trustworthy converter count and give you fair, honest prices based on your metal recovery.
PMR evaluates and processes converters based on the recoverable precious metals contained in the different types of material you possess. We assay your converters in our in-house, ISO-certified lab to give you reliable and accurate results. This is the only way you can fully profit from the value of your catalyst material.
Get transparent converter counts and accurate results with PMR – Contact us for more information.