“The Price List” and its Evolution – Catalytic Converters
The Evolution of “The Price List”
Catalytic converters were first introduced to the North America automotive sector in 1973. Wide spread use of converters in automobiles didn’t come into existence until the early the 80’s. It took roughly another decade before people realized that catalytic converters contained precious metals and had a significant recycling value. In the mid to late 80s the “Converter Price List” was born. The first lists only had 2 categories of converters, “Beads” and “Honeycomb.” There have been a lot of changes since those pioneering days of converter recycling. This article will take you through the history of the, “Converter Price List” right up to how converters are priced in today’s highly competitive 2017 market.
The automotive recycling industry generally knew very little about recycling auto catalyst in the early 90’s. During this time many converters were sent to the shredder instead of being recycled because very few scrappers understood the recycled value of them. Back in the day converters were categorized as either “Beads” or “Honeycomb” and prices ranged between $2 and $5. In those early days those who were recycling converters made a lot of money as the average value of a converter was 14$ to 17$ per can. 150% plus profit made for a good living.
As recyclers caught on to the value, “Honeycomb” was separated into two categories: “Import” and “Domestic”. This now made for three categories in the mid 1990’s. The change came as catalytic converter buyers wanted to be more competitive and precise in their buying. However; analyzing the different types of material was very labor intensive, time consuming and expensive. There were very few laboratories that could accurately give feedback. As time progressed, along with strengthening environmental standards, the average value of recycled converters increased dramatically, due to higher loading of precious metals. In addition the price of platinum, palladium and rhodium sky rocketed in the late 90’s and early part of the 21st century. The root cause of the increase can be accredited to challenged supply and increasing demand for this precious metal group.
As the word got out that there was money in converters, core buyers began to create their own price lists based on information that was highly guarded by catalytic converter refineries. As more and more buyers came into the market place they needed creative ways to earn business from automotive recyclers and muffler shops. During the late 90’s and early 00’s the “all-star” models were born. You may remember seeing these names on price lists: Big GM, Spoon, Stop Sign, Kidney, and so on. The “Price Lists” with the “all-star” models were the only way converter buyers were judged in the beginning.
During the early days of converter recycling, the catalyst industry was difficult to break into because information about individual piece values was highly guarded and controlled by refineries and not freely given out. The lack of information and openness created a culture of secrecy when it came to converters. Nobody, buyers and sellers included wanted to reveal who they were dealing with or where their information came from for fear of not getting the best price on either end. Fortunes were made and lost depending on the quality of the information that was the basis of most price lists. As true as this was in the beginning it is equally important today. The quality of information highly impacts the profitability of a converter core buying business.
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