Converter Recycling: Platinum Group Metal Outlook 2022

Platinum Group Metals
When you recycle your scrap catalytic converters on recovery or assay, you are selling physical metal into the market. It is no different than selling aluminum or copper, it is a commodity. Each catalytic converter contains some or all of three precious metals, called Platinum Group Metals (PGMs): Platinum, Palladium, and Rhodium. Over the past year, these three metals have been on quite a ride to their historic heights in 2021 but have backed off a bit in 2022. Why is that?

Supply and Demand
More than 65% of the world’s demand for PGMs comes from the automotive industry in the making of catalytic converters to control emissions. Jewelry and investment demand make up most of the remaining percentage. At least 75% of the world’s primary supply of PGMs come mainly from mining in Russia and South Africa. The remaining 25% of secondary supply of PGMs comes from recycling of which catalytic converters from automotive recycling makes up the lion’s share.

One global leader in precious metals for more than 200 years, Johnson Matthey, offers the following insights:

Excerpts from the Johnson Matthey PGM Market Report 2022

Supply and Demand in 2021
Following dramatic falls in both supply and demand in 2020, initial expectations of a rapid return to pre-pandemic business conditions proved overly optimistic.

PGM demand in 2021 was hit by global supply-chain disruption, especially in the auto industry, where the impact of semiconductor shortages was amplified by changes in consumer preference in favor of electric vehicles.

As the year progressed, semiconductor shortages cut short the recovery in automotive production.

From July 2021, all Chinese heavy duty diesel trucks were fitted with PGM catalysts. This was the main contributor to last year’s growth in platinum demand, although demand also benefited from some platinum-for-palladium substitution in gasoline catalysts.

Industrial demand for platinum set an all-time high, with exceptionally strong purchasing by glass makers. While industrial buying was robust, except in a handful of highly price-sensitive applications, net demand for PGM in investment and jewellery contracted sharply. Platinum jewellery demand fell to a 30-year low, as Chinese fabrication contracted again.

PGM investment was weak, with liquidation of platinum ETFs and limited investor interest in palladium.

Primary PGM supplies were constrained during early 2021, following process plant outages in South Africa the previous year, but improved as backlogs were processed, pushing all the PGM into fundamental surplus for the calendar year.

There was also an increase in secondary supplies, primarily from autocatalyst recycling. High prices incentivized scrap yards and collectors to expedite the dismantling and reprocessing of palladium-rich catalysts.

Nevertheless, temporary mismatches between supply and demand caused dramatic price movements during the early part of 2021, before increasing availability and faltering demand drove prices downwards from mid-year.

Supply and Demand in 2022
The outlook for PGM supply and demand in 2022 is highly uncertain.

War in Ukraine has created significant risks to supply, due to Russia’s position as the world’s largest primary palladium supplier, and a significant producer of platinum and rhodium. While Russia is not a major PGM consumer, there are wider risks to PGM demand, with the crisis expected to exacerbate existing difficulties in supply chains, augment inflation, and depress economic growth.

Industrial platinum demand should remain robust, but high prices have hit palladium and rhodium use.

Investor interest in PGM appears limited, despite elevated risks to supplies.

South African supplies will fall in 2022, as plant maintenance and operational challenges hit output.

Recovery in auto PGM demand could be compromised by supply chain constraints and Covid disruption. Covid lockdowns in China have hit supply chains and cut vehicle output.

Auto recycling volumes are set to contract, with vehicle scrappage rates hit by weak car sales.

Secondary PGM supplies are forecast to contract this year, as impacts from the semiconductor crisis ripple outwards. With new car sales constrained by availability of new vehicles, rather than by lack of consumer demand, we expect prices for used cars to remain high, and vehicles to be kept on the road for longer than in the past. This is likely to act as a near-term constraint on autocatalyst scrap volumes, especially in Europe and North America, although there is still potential for some growth in recycling in other regions.

Market Balance
Compared to recent years, investment appears less likely to play a determining role in the direction of market balance in 2022. Instead, Russian supply volumes and automotive demand trends are the key sensitivities this year.

Vehicle production forecasts have already seen cuts since the start of the year, based on continuing semiconductor shortages and supply-chain disruption aggravated by the war in Ukraine. The current Covid wave in China could trigger further downgrades, with lock downs hitting supply chains and some automakers halting operations at their Chinese factories in April. It is possible that lower vehicle output will help mitigate the impact of a fall in PGM shipments, although this will depend on the degree of supply disruption. For palladium and rhodium, there is a risk of a move back into deficit; in contrast, platinum is expected to remain well-supplied, but there is potential for the market to be closer to balance this year than in 2021.

What This Means for Automotive Recyclers
United Catalyst Corporation believes PGM market uncertainty and price volatility will remain factors. Stay hedged (locked metal prices) and go, is our advice.

PGMs will still be used worldwide in auto emissions production and with increased loadings. Stronger demand with weaker supply should create support for PGM prices; however, some automakers responding to the Ukraine war have more supply of PGMs on hand and are producing less cars because of supply disruptions and summer holiday shutdowns. This contributes to softer PGM prices.

Historically speaking, PGM prices are still very high. The average price of a scrap catalytic converter in 2012 was $60. Today it is hovering around the $200 level plus or minus depending on the vehicle mix. This may be down from the $300s range in 2021, but still, an extremely high-priced part.

We still see certain models of vehicles with higher loadings ($600 – $1,200 per converter) which is why we have developed tools for buying and inventorying vehicles that can assist auto recyclers with decision making. If interested, ask us about our Catalytic Converter Interchange Beta Group.

For daily updates on the PGM markets, subscribe to our daily e-newsletter or get Platinum Group Metal prices texted twice daily to your phone, TEXT Daily to 844-713-PGMs (7467). You can also call us or email us at

Becky Berube serves the recycling community as President of United Catalyst Corporation, is a Member of the Automotive Recycling Association’s Educational Programming Committee and is the Immediate Past President of the International Precious Metals Institute.