Understanding Your Converter Counts And Averages: Why Taking Complete Ownership Of Your Material Will Optimize Your Returns

Your converter counts and averages and taking complete ownership

In today’s rapidly changing economy, it’s important to have the right information about your converter counts and averages. This will help you maximize your returns. But many automotive recyclers are missing out on high returns for their converters because they’re relying on core buyers to inform about their counts and averages.. So, how can you educate yourself and take complete ownership of your material to ensure you’re maximizing your returns?

Knowing your converter counts and averages will help you to navigate the market and develop best practices for selling your material. And knowing that the value of your converters is a direct reflection of the live PGM market will help you verify price fluctuations and assessments when buying and selling.

Tracking Your Converter Counts and Averages

Tracking your converter counts, especially units pulled and bought, is key to evaluating buyers and calculating unit averages. Detailed unit counts allow you to calculate the unit average per material type from your returns.

When you know your counts, you’ll also be able to check for inconsistencies. For example, if your buyer is counting all aftermarket units in his unit-average calculation as 1 unit, the average price per unit will be incorrect. Buyers offer a higher than normal price per unit to win a bid, but the true unit average they’re paying is actually much lower. One way to avoid this is to know your grading data, including the exact amount of aftermarket units, DPF, Foil cores, beads, as well as the ceramic and fullness counts.

Tracking Tools

Having the proper instruments to evaluate what material you have or what material you’re planning to purchase is critical. That means working with a buyer/processor who’s able to provide accurate unit counts, including partial and full units, and tracking tools for your material. This makes it easier to validate your returns and profits.

If you’re confident that your current buyer/processor is accurately reporting on your material and providing you with transparent data, the next thing to consider is the precious metal market.

Understanding the Patterns in Your PGM Content

The PGM market determines how much the precious metals in your converters are worth. Once you know the going rate for platinum, palladium, and rhodium, you can price your converters accordingly. But in order to do that, you need to know the precious metal composition of your converters.

Converters collected from a truck salvage yard, for example, are largely platinum-based with 30-40% palladium and zero rhodium. Converters obtained from a late-model yard have higher compositions of palladium and rhodium and little platinum. Although yards that purchase older model vehicles will have converters with higher levels of palladium.

Knowing the metal composition of your material allows you to follow the relevant precious metal prices and will also help you understand how changes in the market affect the value of your converters.

For example, if your buyer usually provides a unit average of $135 for a mixed box and the price of both platinum and palladium have increased since the last time you sold converters, your average price per unit should also increase. But if you don’t know your averages or if you’ve been given inaccurate information, it’s hard f to know if you’re being paid fairly.

Taking Ownership

Many recyclers ask why they should make changes when they can stick with what they’ve always known and done. The answer is simple. Change is good, especially when it stimulates a growth mindset. Constant education helps businesses remain adaptable, which makes it easier to survive and thrive in highly volatile markets. Finding new ways to stay ahead of the curve is extremely important. Stop allowing buyers to come into your yard and tell you what you have. Take control of your converters and your returns, and start maximizing your material today.

For more information, visit PMR’s Resource Center.

Published: May 27, 2020
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