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Is there money to be made in scrap catalytic convertors?

December 29, 2009

My name is Justin Krall. I am a graduate gemologist and do a lot of work with gold silver and platinum with jewelry. I buy and sell scrap gold as part of my business and this week I encountered something that I have never before. I was at my mechanic's, getting my car fixed and while I was waiting I asked him if he or his wife had any old or broken jewelry that they don't use.

He said no but he brought me in back of his shop where he has a pile of catalytic converters. He told me he sells them for the platinum content to a local guy who comes around and pays hi, in cash when he gets around 25 of them and he gets anywhere between 800-1200. he showed me the paperwork from the last sale and he was averaging 32 dollars each from his guy. He told me he has heard of people bringing a larger quantity to a refinery and getting a lot more. Basically he gave me the opportunity to try to get more than 32 dollars each on average and if I can make some money as well.

I read most of the q&a's online on your forum and figured I would try asking you a few questions. I guess the first question I have is, do you think there is room for me to make money on a small scale like 25 - 50 converters at 32 dollars each if I were to bring them directly to a refinery? With gold I can tell within a few dollars how much the refinery is going to be sending me based on my own testing for purity. Basically it doesn't matter if one refinery is saying they pay more for platinum if they are shorting you on amount of platinum that is really coming out of the cc's. With what I have learned from your posts online, with cc's they are all different purity levels. This would lead me to believe that if I did bring them to a refinery it would have to be a up and up refinery that one could trust to tell you how much platinum was retrieved. Do you have any suggestions? These last questions I had is a mute point if you do not think the first question is feasible.
Any possible help would be greatly appreciated,

Justin Krall
gemologist - Derrry, New Hampshire, USA

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First of three simultaneous responses -- December 30, 2009

According to information from Wiki, there is about 0.1 troy ounce of platinum in a typical converter. At today's price, that's about $150 worth of platinum.

Of course there's a considerable cost in rounding up enough converters to interest a refiner, there's considerable refining cost, and there's profit for everyone in the food chain.

$32 sounds like a reasonable price to me.

Jeffrey Holmes, CEF
Spartanburg, South Carolina

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Second of three simultaneous responses -- December 30, 2009

I think that they are using other platinum group metals as well as platinum now. They are all expensive, so you would like to know if they are recovering any of those also and just not mentioning it.

I did contract work on occasions near a recovery facility that dumped the residue on the ground. I was shocked that it was not a haz waste and how they got away with it. EPA visited them one day and it cost them a mint to fix the problems they had caused, so it is not all profit by the refiner.

I think that you need to find all of the refiners within say 500 miles that will buy cats from you. If you find one or more, you will instantly be in competition with the current junkie, so your profit margin will rapidly go down as he is willing to pay more for them. He may do it on a loss basis to put you out of that business, so do not drop a lot of bucket into it betting on becoming rich.

I saw this happen to a really good startup business in galvanizing.

James Watts
- Navarre, Florida

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Third of three simultaneous responses -- December 30, 2009

Justin,
I had a converter replaced in one of my cars 4 mos ago. I asked the manager if I could have the old one. He told me no because the state of NY gets the money for the scrap. Maybe he was feeding me a line of bull, but I just wanted my car back with a good inspection sticker on it.
Sure there is money in it, or your mechanic's buyer of the converters would not bother. By the way, $32.00 on average paid to the mechanic leaves a decent profit on average for the buyer. There are varying amounts of platinum in converters, just like engine sizes vary. Usually a ceramic monolith is the substrate for the platinum coating. Contact a reputable refiner, ask what they would pay (on average of course)for a lot of 20. Don't settle for an answer of "that depends". They have been processing them for years, they know what's in them. At $1460.00/tr oz spot price for Pt, that's about $46.00 per gram. Some converters contain 3 grams of Pt, some more some less. Be aware that there will be refining or processing costs involved. You will want to check that the state of N.H. does not have their paws on the deal like New York may have. Good Luck!

Mark Baker
process engineer - Malone, New York

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Thanks, Mark. I couldn't find any hint of such a law, and it sounds a bit unlikely, but I wouldn't have fought for my scrap either. According to my son who is a local cop, at least one brand of car now uses bolted rather than welded connections so the thieves are able to go into dealership lots and steal them en masse without the usual attention-getting noise, smell, and bright lights of welding torches and sawzalls. So there will likely be an increasing number of laws requiring scrap dealers to verify ownership of the converters.

Regards,

Ted Mooney, P.E.
Striving to live Aloha
finishing.com - Pine Beach, New Jersey
December 30, 2009