Converter Theft — Part 1

Montreal, Feb 2022 – Cliff Hope, Sr. Account Manager PMR INC. It seems for quite some time now that Catalytic Converter theft has been a hot news item. For those of us in the scrap/recycling industry we are a little more likely to be keyed into these headlines. Even worse, is if someone knows you are in the converter business, inevitably they are going to send you articles about converter theft you probably didn’t need to read again. This article will explore the issue from a recycler’s perspective and what the impacts are on our industry.

PMR is a privately owned Catalytic Converter Processor. We have been in business for 25 years and offer our suppliers a full range of services as they relate to recycling catalytic converters. It is important to note that we do adhere to stringent Responsible Sourcing guidelines (Stay Tuned for Part 2 of this Series Exploring Responsible Sourcing in detail). All our suppliers are registered businesses that have also signed off in our processing terms that they also adhere to Responsible Sourcing Guidelines.

We are one of the last stops for converters to be recycled. Auto recyclers, and metal yards that dismantle end of life cars and light duty trucks send material to us for recycling by means of toll refining. Our services include processing converters to the point of pre-smelting assay – or in other words we reliably offer precise evaluation of the precious metal content in each shipment/lot of converters and then sell those precious metals in future markets for our suppliers. While there are other aspects to the overall process involving smelting and chemical refining those services are not practically accessible for the average recycler and require an enormous amount of material.

So, what is driving converter theft? We believe there are 2 main factors. Firstly, rising precious metal prices make these cores considerably more valuable as a recycled item. For example, only 3 years ago the average recycled value of a converter was $50 to $60 USD. Whereas in recent months the average value was more than $300 USD per unit. The second factor that has driven theft is easily accessible online information that offers guides to the recycled value of converters. While companies like us only offer such information to properly vetted suppliers, other less reputable sources have profited by selling information about converters to anyone willing to pay a monthly fee for access.

Currently the impacts are not significant to the industry. Companies like PMR only work with legitimate recyclers who are sourcing material from end-of-life vehicles and cars/light trucks bought at auction for parts. While converter theft is an issue, the numbers of stolen units do not make up even a fraction of the millions of converters recycled annually in North America and the rest of the world.

The real impact that converter theft is having on some recyclers depends on state and municipal laws and regulations being developed and implemented surrounding the sale of scrap converters. For now, there is quite a patch work of regulations that in some states/counties have severely restricted the sale of converters to recyclers from the public. While this is a politically expedient solution, all it really does is drive the sale of converters to illegitimate buyers or has the public traveling to states or counties that don’t have the same restrictions. This type of response has limited impact on the overall converter recycling industry.

Recyclers that are running legitimate businesses should be recording information from people selling them converters and asking for the vehicle registrations that the converters have come from to prove proper ownership. Or sellers should have a work order from a mechanic stating the converter was removed from their car because it failed an emissions test and required replacement. PMR offers recyclers electronic means of identification that can assist with confirming make and manufacturer of a scrap converter while keeping a photo record that can be adapted to responsible sourcing practices. If someone is not able to prove ownership of the vehicle a converter came from or does not participate in legitimate automotive recycling, then the units should not be purchased and the authorities notified of any suspicious activity.

From the standpoint of legislation, until there is some sort of nationally standardized practice the patchwork of laws and regulations will not be overly effective in combating converter theft. As mentioned above, thieves looking to sell stolen material will either sell to illegitimate buyers or travel to states and counties that have fewer or no restrictions for the sale.

Once again from our point of view we will not process material from individuals that do not have a registered business, a standard practice within the small circle of larger companies offering similar services. Our suppliers must sign terms that outline responsible sourcing practices and prove they have a place of business that is following recycling laws and guidelines.

Looking into the future there will always be a need for the rare earth metals that are being reclaimed from catalytic converter recycling. Recycling is one of the best ways to reduce carbon emissions and climate change and is considered an essential service. To that end as consistent scrap legislation is introduced and enforced converter thefts will be better managed over time. In the meantime, PMR is doing our part by offering resources to our supplies that comply with state laws, assist in identifying converter types and only working with legitimate recyclers that are committed to the communities they serve.