Precious Metals Refining: The Ever-Changing Market

Precious Metals Refining: The Ever-Changing Market

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The old paradigm in precious metals recycling was far more controlled. In the 1970s and 80s, before the wide use of catalytic convertors began, nearly all the platinum group metal (PGM) in circulation was in the hands of industrial users. These companies managed their inventories, ensured recycling was done at end-of-life, and in most cases tracked their precious metals refining history. This resulted in roughly 90% of the PGM coming back to the precious metals refiners, and these refiners knew what to expect as far as the elemental matrix they would receive. Refining systems were, therefore, built to handle large streams of the same product, and the clients were corporations. This system began to radically change in the late 1980s when electronics and automotive catalysts became the new main sources of these recycled precious metals.

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Auto catalyst, electronics, mobile phones, tablets and home computers created two major changes in the recycling and recovery stream:

1) many of the obsolete items never make it back to the precious
metals recycling process due to improper disposal (somewhere around 30% of the PGM is lost, according to best estimates); and 2) the precious metal within these devices is now combined with dozens of other elements, making a recovery complex and costly. For example, Encyclopedia Britannica notes that there are forty-four elements in the average mobile phone, while petroleum reformer catalysts contain perhaps four elements. Even when the consumer does put his or her obsolete device into the precious metals recycling chain, it must first go to the collectors, dismantlers and other middlemen, necessarily adding costs. Combine that with more strict environmental controls, international shipping challenges, and lower relative PGM prices, and the growing problem is easily noted; profit margins are shrinking, while concurrently, the consumer recycling model disperses smaller profits over an increasingly long chain of secondaries.

In short, it is getting more expensive to recycle at a time when environmentally responsible and more cost-effective recycling is clearly what the
world needs.

If you have any questions or would like to chat more - please reach out to Brad Cook at bcook@sabinmetal.com