Catalytic converter thefts rise
London Police are reporting a 50 percent increase in the theft of catalytic converters, as precious metal values continue to soar.
Motor insurer, Admiral, says it received 400 claims in one month alone for damage caused to vehicles from the theft of catalytic converters. It also says that thieves are focusing on hybrid cars as the catalytic converters found on these vehicles contain a higher concentration of precious metals and are generally less corroded.
Police in Kent are “relentlessly pursuing” thieves after seeing an increase in catalytic converter crime in the area. Criminals are able to steal the catalytic converters in under a minute and are carrying out the offence in broad daylight.
This flurry of crime in Kent has led to the local police offering garages in the area permanent security-marking kits for technicians to mark the catalytic converters on cars when they are brought in for a service. That way if the part is stolen, it will be harder for the thieves to sell on, and easier for police to locate, identify and return to the owners if it’s recovered.
Volatile precious metal prices
Raw materials used in the manufacturing of catalytic converters continue to fluctuate rapidly. Rhodium, used in the manufacture of catalytic converters, is one of the most expensive precious metals. It’s also one of the rarest elements on Earth and arguably one of the most volatile pricewise.
What’s causing the price rises?
There are many factors influencing the sharp rise in precious metal prices, in particular rhodium, which has left the price of gold in its wake. The main use for rhodium is in catalytic converters that are designed to clean vehicle emissions. Rhodium, amongst other precious metals including palladium and platinum, act as the trigger for the chemical reaction which starts to break down harmful exhaust gases.
The global drive to improve air quality, particularly in areas like China and Europe, has seen demand surge for rhodium and palladium. Furthermore, the move from diesel to petrol trend puts additional pressures on rhodium supply which is not used in diesel applications.
This tightness of supply is another contributing factor to its sky-high price. More than four out of every five ounces of rhodium are mined in South Africa, extracted in minuscule quantities alongside more abundant metals such as platinum, palladium and gold.
What is the long-term outlook?
In 2008, rhodium touched £5,560 per t oz as the global financial crisis hit, which then saw the metal price crash by 90% just weeks later. This was an artificially high price and is unlike the price rises we see in the market today. The current price of rhodium has never been seen before and with that brings the risk it could crash again like in 2008.
With so much uncertainty over the future of the price of this rare metal, 2021 could be another volatile year with either regular price increases or a sudden drop. BM Catalysts’ short term buying strategy helps ensure prices remain competitive if precious metal prices drop significantly.
Although the automotive sector is the primary consumer of these precious metals, demand, and therefore cost influences, also come from buyers such as jewellery makers and commodity investors.
An increased cost of the precious metals used in the making of catalytic converters has to be reflected in their sale price – it’s unavoidable. The price of the precious metals used can be up to 90% of the overall cost of producing a catalytic converter, underlining the fact that the price of parts is dictated almost entirely by the market performance of these metals.