Exploring Catalytic Converter Recycling: The Process Behind PGM Extraction and How You Get Paid
While you might imagine that extracting the precious metal content from catalytic converters would be as simple as cracking the converter open and prying the platinum, palladium, or rhodium out, it’s actually an incredibly sophisticated process. It’s also a process that needs to be carried out with a great deal of precision and care if everyone is going to benefit. To get a better sense of the toll-refining process, Thubprint headed over to PMR and spoke with some of its experts to get the full picture. Watch his video now or keep reading for more.
What Happens to Catalytic Converters After They’ve Been Sent to a Toll-Refiner?
When converters arrive at a toll-refiner’s facility, they go through three refining stages. The first and most important stage is processing, where material is decanned, crushed, and commingled until it becomes a homogenous powder. This step is especially crucial because without a homogenous powder, a proper sample cannot be taken for analysis.
The next stage is sampling, where a representative sample is taken from the entire load of converters that were just processed.
The third and final step is the assay. Assaying is a scientific analysis that determines the exact amount of platinum, palladium, and rhodium contained in your converters.
Doing Assay Right
It’s important for your processor to use industry-standard technology, in particular XRF benchtop machines and ICP. Toll refiners will have their own reasons for choosing one method over the other—XRF machines are less expensive up front but depend on high-quality samples, while ICP is more expensive but offers greater accuracy—so you should be prepared to ask the right questions to ensure you’re getting a fair price at the end of the day.
There are also some key data points to keep in mind when looking at assay results. An assay sheet that includes information such as gross/net weights, converter counts, troy ounce returns, return percentages, market prices, and more, will help you make informed, and ultimately profitable, decisions.
This brings up an important point. PMR experts stress that to accurately evaluate a toll-refiner, recyclers need to explore more than what they get from an assay report.
What to Look For When Comparing and Choosing a Refiner?
It’s important to remember that a toll-refiner should have evaluation, monitoring, and pricing tools available for their suppliers. With these tools, recyclers can buy and ship their material profitably and confidently, but most importantly, they get a strong understanding of their businesses.
Processors should also provide a clear description of any industry terms and fees such as hedging, tolling, assay, and lease rates. This fosters a transparent relationship between supplier and processor, but also helps suppliers navigate the industry confidently.
While helping you understand industry terminology and processes is crucial, another important part of the process is payment. You should be prepared to ask your toll-refiner what options they provide for payment, hedging, and tolling. Let’s take a look at what you should be asking for.
Payment Options with a Toll-Refiner
There are various ways to get paid once catalyst material has been processed, and yes, cashing out at current market price is one of them. However, toll-refiners like PMR offer different payment options such as hedging and tolling their material. These options allow recyclers to take advantage of market trends that meet their needs.
What is Hedging and Why is it Beneficial?
Hedging refers to the process of locking in the price of a metal at the current market price. When recycler’s hedge their metal ounces, they reduce the risk of adverse market developments affecting their return on investment.
Tolling Opportunities and Their Benefits
Tolling opportunities give recyclers the option to wait out the market. PMR suppliers, for example, have the option to toll their material, which means securely banking precious metal ounces for a period of time without hedging or receiving payment.
Tolled material, however, cannot be hedged and is not eligible for advance payment until the settlement contract period of 115 days has ended.
At the end of the contract period, recyclers can choose to either continue holding their ounces in hopes that the market will rise or hedge and take final payment. They can then partially hedge or sell their ounces through multiple transactions.
On the other hand, PMR suppliers who choose not to toll their material must hedge and take final payment before the end of their contractual period. This opportunity allows recyclers to get a quick return on their investment.
It’s Time to Get to the Core of Your Material’s Value
As a converter recycler, you want to get the most out of your catalyst material’s true value. That’s why it’s crucial to partner with a processor that peels away the layers of confusion and helps you get a clear understanding of your assay reports. Because when you’re equipped with all the answers, you can hedge more profitably and get the best possible return for your converters.