The catalytic converter recycling industry has faced extreme highs and lows in recent years. Dafydd Dylan, Head of Autocatalyst Recycling at F J Church & Sons Ltd, reflects on these challenges, market changes, and how the company’s long-term approach, innovation, and core values continue to drive its success.
The last five years have felt somewhat like a fever dream. Did rhodium really hit $30,000 per ounce, with averages comfortably in the £200s per catalytic converter?! In 2020, the world changed beyond recognition for us all. We faced the fear of the imminent pandemic, the challenges of managing through it, the mania of the post-pandemic recovery, and the subsequent volatility in commodity prices and supply.
It certainly didn’t feel it at the time, but 2020-2022 were the good times, in terms of the catalysts business. The extremely elevated prices pulled out every cat lying in every garage and yard in the country. Everyone was a cat expert; all you needed to do was speculate on PGM price…easy. Not so much, and I hardly enjoyed a second of those years, if truth be told. Like everyone had to in their own way, spinning the plates of our metal’s positions and cash flows in this unprecedented era will be a lesson that will stay with me my whole career.
The last two years have been extremely difficult for the catalyst recycling market, as well as many other sectors within the metals and recycling field. Volumes have contracted, prices crashed, and competition increased along with the crippling rise in costs of running every business and increased regulation. During the boom years, investments in the PGM field have resulted in a dynamic of under-supply and over-capacity, with a sprinkling of Private Equity suits to make things even more fun. PGM Mine supply is coming through, and the global economy is stuttering in terms of demand, with the overall spectre of electrification. This is not a recipe for the price of the PGM basket to rise. President Trump may help with a sugar rush, but the fundamentals seem not to be hugely exciting.
As catalyst recyclers, we have not really helped ourselves as a group of buyers, where in most auctions, you’d find someone willing to pay far more than the underlying PGM value for reasons unknown. I speculate that it’s a combination of bad buying, speculation, and a lack of control, and a delay in getting out of ‘market mania mode’ where you could buy a cat, and the next day, it was 5% more valuable.
The relentlessness of how the PGM markets can rise and fall has been eye-watering and has happened before in ’02, ’08, and more recently in ’20, ’22 & ’23. As a sector, in dollar terms, the industry turnover halved in basically one financial year. Patrick Church always used to say, “If you want to gamble, go over there,” pointing towards Canary Wharf, visible from our office in Essex.
Why am I saying all of this? F J Church has been around since 1887. It’s something we are extremely proud of, and we hope it is a testament to how we approach business.
Focusing on being reliable and fair, having a view on the long-term in relationships, keeping costs under control, and a suspicion of speculation, gimmicks, and an overzealous sales approach. The cycles will do their thing, but we aim to keep the same values and not try ‘to reinvent the wheel.’
There might be dark clouds hanging over the global economy and geopolitics, but we are focusing on the future and our strengths. It feels like the job is where it was in the pre-COVID cycle, with volumes improving in the market, and an increased acceptance of pricing and a more prudent approach to risk management.
We are continually improving our technologies on the App, our testing capability, and on being the most competitive across the board and being able to offer ‘refining level’ buying prices but pay you immediately. We have the independence at F J Church to work with a global refining and trading network, have the in-house capability to deal with ceramic, foils, and DPF, and are always in the market to support our suppliers.
F J Church also has three business pillars of Catalysts, non-ferrous with a focus on Copper / Cables and an E-scrap recycling division. As we look ahead, we remain committed to our core values of reliability, fairness, and long-term relationships. Our focus on innovation and efficiency will drive us forward, ensuring we continue to provide exceptional service and value to our partners. With a strong foundation and a clear vision, we are confident in our ability to navigate the cycles and emerge stronger. Thank you for your continued support and trust in F J Church & Sons Ltd.
About F J Church
F J Church has an app/play store application, and an online portal to support risk management, compliance and pricing for suppliers.
F J Church has the trading expertise, scale, and in-house processing to be a global player in the Catalyst Recycling sector. It works with specialist refiners for each grade.
Visit F J Church or contact Dafydd at Dafydd@fjchurch.co.uk
