Most people know that catalytic converts contain platinum, but you may not have heard of the metal Rhodium, even though it is a major component of your vehicle’s exhaust system.
In the last few years, the value of Rhodium has increased a great deal. As a point of reference, in 2020, the metal became eighteen times more valuable than gold. In fact, only diamonds are more valuable ounce-per-ounce.
Since almost all vehicles contain this metal, that means the value of junk cars has increased as well. You might be wondering by how much, and what it means for your old car. The information below will tell you everything you need to know about Rhodium and how its presence impacts the resale of your scrap car.
What is Rhodium?
Rhodium belongs to the same group of precious metals like platinum, along with ruthenium, palladium, osmium, and iridium. A precious metal is rare and has high economic value. The most notorious ones are gold, silver, and platinum.
Historically, some currencies were either backed by or physically minted on precious metals (for example, the Gold Standard). That is because societies agreed on the value of the metals as a commodity.
In 1803, the British chemist William Wollaston developed a process for removing Rhodium from platinum and palladium ore. For almost 170 years after that, the metal was not widely used.
That is until the passage of the Clean Air Act of 1970, which required stricter car emissions standards. To meet these, automobile manufacturers began installing catalytic converters. These devices break down or alter harmful emissions from a vehicle’s exhaust.
Other uses for Rhodium include coating for optic fibers and optical mirrors. Rhodium is also used in mammogram filters and neutron detection processes at nuclear power stations.
Since it does not tarnish, sometimes Rhodium is used to coat jewelry. The reason it is not more ubiquitous as a jewelry material is because it looks much like silver. Since Rhodium is much more expensive, people do not wish to pay for something that others assume is silver.
Only about 30 tons of Rhodium is mined in the world every year. One reason for this small amount is that it is hard to extract. That’s because Rhodium is a byproduct of platinum production.
For each unit of ore mined, 60 percent is platinum, 30 percent palladium, and only 8 or 9 percent is Rhodium. So, to produce more Rhodium, you must scale up platinum mining.
There has been a platinum oversupply since 2015, which has slowed production (and, in turn, the ability to mine Rhodium). Also, like so many other industries, the COVID-19 pandemic slowed mining operations.
South Africa, for instance, produces 80 percent of the world’s Rhodium. Some underground mines there are still not operational. For this reason, Rhodium shortages are expected to last until at least 2025.
Every vehicle manufactured in the United States is equipped with a range of components to help regulate its emissions to meet federal standards. The catalytic converter plays a central role in this.
It uses a chamber where it changes harmful compounds in emissions into safe gases, such as steam. The metals inside the chamber act as a catalyst that either split up or oxidate dangerous gases before releasing them through the exhaust.
For instance, catalytic converters oxidate hydrocarbons and carbon monoxide to produce water vapor and carbon dioxide. The metals break down other gases like nitrogen oxide, which is dangerous to both plants and animals, into harmless nitrogen and oxygen molecules.
Rhodium is used in small quantities in catalytic converters, but it plays a vital role. It a very hard, durable metal that is resistant to corrosion.
While catalytic converters rely on other metals, automobile manufacturers have not found a suitable replacement for Rhodium. They are by far the largest consumers of the product. As emissions standards continue to increase, so has the demand for Rhodium.
How Rhodium Impacts a Vehicle’s Value
The dollar equivalent of Rhodium in any given car fluctuates with the value of the metal and the type of vehicle. Some scrap catalytic converters are only worth $100, but others can fetch up to $1,000 or more. This alone has spurred a recent surge in catalytic converter thefts.
Certain cars have more Rhodium than others. For starters, diesel engines rely more on platinum. Hybrid cars have catalytic converters, but they tend to use more palladium than Rhodium. Electric vehicles do not need catalytic converters and do not rely on Rhodium for production.
In general, the larger your vehicle’s engine, the more emissions it produces and the bigger catalytic converter it will have. Gasoline-powered cars, light-duty trucks, and motorcycles will have between two and six grams of Rhodium. Larger SUVs and trucks can have as much as an ounce of Rhodium in their catalytic converts, which can be worth thousands of dollars.
It’s important to note that there is a market for Rhodium. Earlier this year in February it was priced at $27.4k an ounce, though it would drop down to $16.9k as of this posting, which has made it slightly less valuable to potential buyers.
Still, some buyers are on the lookout just for catalytic converters to buy from junk cars. However, know that if you just remove this valuable piece, it could make the rest of your car worthless to other potential buyers.
Also, it is illegal to take your catalytic converter off of your car, both federally and in the state (Florida Statute 316.29351). In fact, there have been recent FBI stings focusing on those who buy or sell only catalytic converters.
With all of this in mind, you really need to communicate with the company you are selling your car to and find out exactly what they are interested in. You want to find a place that will de-process the car entirely, and not just the catalytic converter, which has the side benefit of also making your whole car more valuable.
Get Paid What Your Car is Worth
Now that you understand the role Rhodium plays in impacting car value, you can better determine what the best course of action is for getting rid of your junk car. It is important to have an idea of what your vehicle is worth before you sell it and keeping an eye on Rhodium markets is a good way to do that.
At All Car Buys, we focus on combining fair pricing with convenience. We will strive to get you the best price for your car–regardless of its condition–and we’ll tow it away for free. We will beat any existing offer. Reach out to us today for a free estimate.