What Drives Precious Metal Prices? Key Market Forces Explained

Catalytic converters have become one of the most valuable automotive parts on the recycling market today. The reason is simple: they contain some of the rarest precious metals on Earth, platinum, palladium, and rhodium.

These three metals can surpass the gold price and even the most traded silver price benchmarks on global markets. Because they’re traded like bullion, their recycling value depends heavily on global precious metal prices, spot price movements, and daily market fluctuations.

But what exactly makes these metals so valuable, and why do their prices shift so much?

We’re breaking down what recyclers need to know about the metals inside scrap catalytic converters, and how the market determines their value. Keep reading to get valuable insights on key factors driving the current price of platinum, palladium, and rhodium!

What are catalytic converters and what precious metals do they contain?

Catalytic converters are emissions-control devices found in the exhaust system of gasoline and diesel engines. Their job is to neutralize harmful pollutants, such as carbon monoxide, hydrocarbons, and nitrogen oxides, before they exit the tailpipe.

To do this, converters rely on extremely rare precious metals that serve as catalysts.

Platinum

Platinum is used in both diesel and gas-engine converters. Though historically more expensive, recent years have seen platinum prices fall below palladium prices.

That’s because demand shifts and automotive industry changes pushed carmakers to switch between palladium and platinum as price and availability shifted.

Palladium

Palladium has become the dominant catalyst for gasoline engines, driving prices to sometimes double or triple. Because of strong demand, palladium prices frequently exceed the gold price, making it a lucrative metal for recyclers.

Rhodium

Rhodium is the rarest of them all. It is used primarily for reducing nitrogen oxides, and it’s so scarce because it can only be mined as a byproduct of nickel and other precious metals.

Measured in small fractions of a troy ounce, it still commands a higher value than platinum and palladium. Rhodium's limited supply contributes to some of the sharpest market fluctuations in the entire precious metals sector.

PGMs are difficult and expensive to mine. Recycling catalytic converters has become one of the most efficient ways to recover them. That’s why the precious metal content inside used converters makes them more than just ordinary scrap metal, and sometimes, makes them higher on the market than the price of gold.

What are PGMs worth on the precious metal markets?

Like most commodities, PGMs are traded globally, and their value is determined by the same market mechanisms that influence the gold price, silver price, and other forms of bullion.

All precious metals, including PGMs, are priced in USD and quoted per troy ounce. This standardized unit allows global traders, refiners, manufacturers, and recyclers to follow the same benchmark pricing system.

It’s important to remember that platinum, palladium, and rhodium prices vary every day. Let’s take a look at how the PGM market works.

How does the PGM market work?

Because the value of a converter is tied to the quantity and grade of PGMs inside it, recyclers rely on accurate price feeds to assess their returns. But each metal moves along the market curve by the beat of its own drum.

• Platinum prices and palladium prices are published on major exchanges, with active trading throughout the day.
• Rhodium is not traded on major exchanges, making it more volatile.
• The market provides live spot prices that display the metals’ current price in real-time, which you can use to evaluate catalytic converter value.
• These spot prices shift continually as traders respond to supply data, economic conditions, and latest news from mining regions.

How often do the precious metal market prices change?

Unlike static commodities, precious metal prices change constantly. During active trading hours, prices can shift minute by minute.

Let’s take a look at the factors that make PGM prices especially dynamic.

24-hour trading

With global markets in Asia, Europe, and North America, most metals experience near-continuous trading activity. Even when one market closes, electronic trading keeps spot prices active.

Rapid reactions to global events

Any disruption, whether geopolitical tensions in mining countries, shifts in regulatory policies, or economic announcements, can generate immediate real-time price adjustments.

Limited supply and surging demand

Even small changes in supply or demand can create noticeable short-term price movements. This means the current price of a converter can fluctuate throughout a single week—or even in a single day.

Is the platinum price always lower than gold and palladium prices?

Many assume platinum is always the most expensive precious metal due to its rarity, but the market tells a very different story.

Historically, platinum prices often exceeded the gold price, especially during the early 2000s. That’s when diesel vehicles, which use more platinum, were dominant in Europe. But several changes reversed this trend.

Decline of diesel engines

Following regulatory changes and public opinion shifts, diesel vehicle production declined, reducing automotive demand for platinum.

Surge in palladium use

Automakers shifted toward palladium for gasoline engines, creating tighter supply and skyrocketing palladium prices.

Market rebalancing

Economic uncertainty and shifts in speculative investment caused platinum to lose its premium status compared to gold.

Rhodium’s unique trajectory

Rhodium has reached record highs multiple times due to its extreme rarity, often surpassing both platinum and palladium in value.

So while platinum is traditionally associated with luxury and rarity, itshistorical price no longer guarantees it will outpace palladium or even gold. Whether platinum trades higher or lower depends entirely on the ever-evolving precious metals market.

Main factors that influence the price of precious metals in catalytic converters

The value of platinum, palladium, and rhodium is shaped by a complex web of global forces. Let’s take a look at the major drivers affecting the precious metal prices critical to catalytic converter recycling.

Supply constraints and mining output

The majority of the world’s PGMs come from two countries. South Africa is the leading supplier of platinum and rhodium. And Russia is a major exporter of palladium.

Any disruptions like labor strikes, political events, sanctions, or power shortages can affect the supply and create upward pricing pressure.

Automotive industry demand

Automotive production plays a central role in catalytic converter and PGM pricing. Let’s see how this plays out.

• More gas vehicles yields higher palladium prices
• More diesel vehicles generates higher platinum prices
• Stricter NOx regulations creates higher demand for rhodium

This demand can shift quickly and cause dramatic market fluctuations.

Recycling volume

As more converters are recycled, more PGMs re-enter the global supply chain. In turn, high recycling output can soften prices, while shortages of scrap can increase value.

Currency movements

Since precious metals are priced in USD, the strength or weakness of the US dollar influences global buying power. Even modest currency shifts can create fast changes in spot price and current price levels.

A stronger USD means metals become more expensive abroad, demand lowers, and prices decline.

A weaker US dollar means metals are cheaper internationally, driving higher demand and increased prices.

Investor activity and speculation

Like gold, PGMs attract investors, like fund managers, traders, and hedge funds. And they all respond rapidly to inflation forecasts, interest rates, global economic indicators, and the latest news from mining regions. These reactions can trigger short-term price movements.

Changes in technology and emissions regulations

As countries adopt tougher emissions standards, automakers adjust catalytic converter formulations, sometimes increasing PGM loadings. On the other hand, the transition to electric vehicles may eventually reduce PGM demand (not anytime soon), pressuring long-term pricing.

Substitution between metals

When palladium prices surge, automakers may shift back to platinum. And vice versa. Substitutions like this can cause prices to rebalance rapidly, especially for metals with smaller markets like rhodium.

What does all this fluctuation mean for catalytic converter recyclers?

The value of platinum, palladium, and rhodium inside catalytic converters is tied to the global precious metals market. There, live spot prices, supply changes, economic trends, and market fluctuations all shape the daily worth of your converters.

Because these metals trade like bullion and react to global developments, the current price of a converter can change in an instant.

Understanding these dynamics gives you the power to make informed decisions and maximize your profits from catalytic converter recovery.

That’s why it’s important to have access to concrete pricing tools that meet your pricing, hedging, and payment needs. PMR, for example, provides live dynamic metal pricing on our website, integrated into our exclusive evaluation tools like photo-grading, VIN/TRIM, inventory boxes, and more.These help you get real-time pricing and empower you to buy and sell accordingly, while maximizing your returns.

In a market as complex and fast-moving as PGMs, being informed isn’t just helpful–it’s essential. To learn more about catalytic converter recycling, or to get access to PMR’s pricing tools, book a free consultation!