BASF: Tightening capacity, higher costs create perfect storm for auto cat recycling

Increasing amounts of hard-to-process materials, a fast-growing market and higher lease rates/metal prices are creating upward price and settlement terms pressure in the auto cat recycling industry, according to BASF Corp., Florham Park, New Jersey.

The amount of feed containing hard-to-process materials, such as titanium (Ti) and silicon carbide (SiC), in spent catalyst recycling streams is increasing. This is reducing precious metals recycling capacity because these new materials require more time to process through smelting assets than the traditional cordierite ceramic substrate material, according to the company. Longer processing time means longer settlement terms are needed. Furthermore, most refiners cannot process the material as quickly, which will result in lower throughput in the smelter assets. This development has constrained the existing processing assets and is creating upward pressure on processing fees, the company adds.

Demand for recycling is growing faster than the capacity to process spent catalysts, BASF says, adding that it will take time for the industry to add more capacity.

Finally, higher precious metal prices and lease rates are creating additional pressure by increasing the cost that refiners pay to finance the metal in their processes. For example, lease rates for palladium have gone from a couple percent to more 20 percent in the past several months, BASF notes.

These conditions are creating a challenge in the PGM (platinum group metal) recycling market.

BASF says it is addressing the challenge by continuing to invest to ensure sustainable and efficient recovery of PGMs.