ScrapCATapp Mailbox - Can you explain and help me understand PGM pricing and terms? A

Can you explain and help me understand PGM pricing and terms?
Why do different Buyers quote different prices on the same day?

CG:

Scott, can you explain to our Sellers how to understand PGM pricing and the terms that are used when buying and selling these metals? Is this something Converter Sellers need to know or focus on?

SV:

Christopher, this is a question that was just asked by one of our successful long-term Sellers. He was attempting to understand how to compare one Buyer’s claim that they have higher (better) PGM prices.

First, let me review the basic terms involved with Buying/Selling PGM Metals:

Bid Price = The price someone is willing to pay you for your metal.

Ask Price = The price someone is willing to sell you their metal.

NOTE:

There can be huge deltas (differences) between the Bid Price and Ask Price – This has to do with the availability/liquidity of the material. You will notice large deltas especially for “thinly traded metals” like Rhodium. (See thinly traded metals below)

Spot Price =

Is the price someone is willing to pay or offer for the Immediate delivery of high purity precious metal. Spot Prices have a Bid/Ask price associated with them. The key word here is the Immediate Delivery.

Forward =
Price

If one cannot deliver high purity precious metals Immediately then the Bid/Ask price you will receive is called the Forward Price.

Depending on the Supply and Demand, or the liquidity of the metal, the Forward Price can be either a Discount or a Premium to the Spot Price.

NOTE: When you are hedging your catalyst material, you are getting the Forward Price.

Highly Liquid / =
Heavily Traded

This means that there is a high volume of buyers and sellers all over the world that are actively trading in the metal. Gold, Silver, Copper, Aluminum are all Highly Liquid metals/markets.

Thinly Traded / =
Low Liquidity

This means that there are relatively few buyers and sellers that are actively trading this metal and the trades that they do are very small. Rhodium, Ruthenium, Iridium are all Thinly Traded metals.

CRG:

OK, good background, now, can you explain why the prices that are posted on our website sometimes different than the prices quoted to our Sellers directly by Catalytic Converter Buyers? And again, do Sellers need to focus on this?

SV:

The prices on the ScrapCATapp website are directly from Kitco.com. These prices are not “OUR” prices, they are the prices from Kitco’s marketplace in real time. Kitco is one of the few marketplaces that buy and sell the PGM metals and freely share/publish their prices. While these prices are not always the same as other marketplaces, they are usually pretty close.

CG:

Got it. This goes hand in hand with the reminder that ScrapCATapp does not buy or sell converters, we are the marketplace for any participating/interested Buyer or Seller. The PGM prices on our website are not set by us, we provide Kitco’s real time prices on our site to give Buyers and Sellers a reference.

Click here to Continue Reading Part B

We Do NOT Buy. We Do NOT Sell.

The Premier Online Auction/Marketplace

for Scrap Catalytic Converter Sales