Accelerate Your Business with Quick Turnaround Times for Catalyst Material and Capitalize on Market Trends
In an era of supply chain disruptions, rapidity becomes your best business partner. When you accumulate and sell converters in the same market, you’re sheltered from adverse market movements. And with recent market volatility, you want to make sure that you turn catalyst material quicker than ever.
So, how can you optimize the market to your benefit?
To make informed decisions for your business in today's circular economy, it’s important to understand the PGM market and related industries like the automotive and scrap metal sectors. This way, you can make the most informed decisions for your business.
The automotive, scrap metal, and PGM markets are three major sectors that you should be watching closely.
Let’s look at the global supply chain disruptions caused by the pandemic, for example. High demand for semiconductor chips and low supply caused a major shortage during the first quarter of 2020. New vehicles were left unfinished and weren’t sold.
When that shortage happened, automakers witnessed a production shortfall that led to a 4.5 million new vehicle shortage in late 2022. In turn, this ongoing trend of low supply of new vehicles caused the prices to increase by 30%.
These new vehicle price increases and chip shortages affected the scrap metal market as well. It created a pipeline to less available scrap and historical market movements.
The Scrap Metal Market
Vehicle owners now keep their older model vehicles for much longer due to the sharp rise in newer model prices since the pandemic. In 2022, vehicle lifespan rose to a record of 12 years. Today, that means less and less end-of-life vehicles reach the scrap yard, and in turn, less scrap metal becomes available.
With less available scrap vehicles, the number of end-of-life converters that enter the recycling chain is low. This is why we’ve seen huge fluctuations in the precious metal market in 2022, as supply for scrap metal and converters declined.
The PGM Market
The supply chain disruptions had huge impacts on PGM market prices.
The most extreme volatility was witnessed in palladium, which ranged from a high of $3000 to a low of $1600 during 2022. The price for palladium fell drastically to $1500 at the beginning of 2023 and hasn’t recovered since.
Platinum varied as well, with a high of $1100 and a low of $800. It was especially volatile during the summer months but gradually took an upwards trend after. However, at the start of 2023, platinum market prices dropped and remain slow to recover.
In April 2022, rhodium trended at $18000 and then took a nosedive in mid June. We have yet to see rhodium climb back to its spring 2022 glory, but in summer 2022, it climbed back to $1500. Prices dropped to below $12000 in December 2022 and opened the new year in a downwards trend.
What we know is that the PGM market is currently highly volatile, with market prices continuously declining since reaching their peak in early 2021. Now is the time to be quick with your catalyst material if you want to catch current market trends!
Accumulate & Ship Material Quickly
With an unpredictable PGM market, you want to grasp current market trends rapidly so you can act accordingly. That means accumulating and selling in the same market to avoid adverse market trends. But it takes more than just the ability to buy & sell converters quickly.
Do You Have the Right Processing Partner?
To be quick with your converter shipments, you’ll want to ship out smaller lots. That means that your processing partner needs to accommodate small lots without an extra fee.
PMR, for example, has a low lot requirement of only 150 converter units at no extra cost. Suppliers can accumulate their material and ship at the frequency they want.
Converter Evaluation Tools
To accumulate material quickly, you need the right tools to evaluate and price converters. Make sure your processing partner offers easily accessible tools, like PMR’s photo grading and VIN/TRIM tools.
With photo grading, suppliers receive converter estimations in only 90 seconds. VIN/TRIM allows suppliers to quickly estimate the price of a vehicle’s converter by VIN numbers or year, make, and model.
Quick Hedging & Payment Options
In addition to small lot requirements, PMR suppliers can hedge their precious metal prices and request payment quickly. This way, they don’t miss out on current market trends that accommodate their business model.
Make sure that you have access to these advantages. Small lots at no extra cost help you accumulate and ship out as much as you need. Quick hedging & payments provide rapid ROI so that you can reinvest your capital that much faster. It’s the only way to ensure that you optimize the market to your benefit.
For more information, visit PMR’s Resource Center or contact a PMR Representative.