Catalytic converter thefts are dropping. It’s no coincidence that metal prices are falling, too

Posted on July 20, 2024 by Peggy

Cost of Living8:09Why catalytic converters aren’t worth stealing anymore

As the value of the precious metals found inside catalytic converters steadily falls, so too are the number of police reports being filed across Canada about the automotive parts being stolen.

Criminals steal catalytic converters, which control emissions from a vehicle, because they contain small amounts of platinum, palladium and rhodium.

Prices for all three metals began climbing in 2020 and 2021 before levelling off — or, in the case of rhodium, plummeting by about 80 per cent from a high of almost $30,000 US per troy ounce in March 2021.

“I’ve just heard anecdotally that across North America the problem has diminished,” said Const. Dani McKinnon, public information officer for the Winnipeg Police Service.

Winnipeg police have had 25 thefts reported so far this year compared to 1,797 for all of 2022.

It’s a similar story in Calgary, Edmonton, Montreal and Halifax, where police data shows substantial decreases in reported stolen catalytic converters in 2023 after peaking the previous year.

In Vancouver, the number of reported thefts reached their highest point in 2023 but police say thefts have been trending downward. As of July 8, the Vancouver Police Department had 541 thefts called in this year, down 14 per cent from the same period in 2023.

Edmonton police have also seen a big change in year-over-year thefts, with 330 reported in the first half of 2024 versus 1,222 during the same period the year before.

What happened with rhodium prices?

The soaring price of rhodium was triggered by shortages of the metal as a result of COVID-19 lockdowns and an explosion in 2020 at a large rhodium processing plant in South Africa.

“It completely stands out as a freak event,” said Henk de Hoop, CEO of SFA Oxford, a U.K.-based commodity consulting firm.

Rhodium production has now ramped back up, stabilizing supply. Meanwhile, demand has fallen as vehicle manufacturers focus more on electric vehicles, which don’t have catalytic converters.

That’s translating into a lower trade-in price at scrap metal yards for catalytic converters — or, as Dov Dimant calls them, “cats.”

“Volkswagens had really expensive cats coming off of Jettas, Golfs. Like that was one of the easiest, most lucrative ones to steal,” said Dimant, owner of Vancouver’s Capital Salvage.

“Those were 300, 400 bucks a pop. Now you’d be looking at about 100 bucks, maybe $125.”

Scrap yard owner shows what a full catalytic converter looks like when it's brought it to be recycled. — Capital Salvage owner Dov Dimant holds up a full catalytic converter that’s been brought in for recycling at his Vancouver scrap yard. (Submitted by Dov Dimant)

No longer ‘easy money’

McKinnon says when metal prices were high, “it made sense” for thieves to steal these automotive parts.

“The scrappers weren’t being monitored and so it was a quick turnover for a thief to bring one in, and both sides would get a little bit of cash out of it,” she said.

“It was easy money.”

But now the money isn’t as good — and boosted initiatives to deter thieves means it’s less easy, too.

For example, provincial governments in B.C., Alberta, Saskatchewan, New Brunswick and Manitoba have made it tougher for criminals to cash in on stolen catalytic converters by requiring buyers to track transactions including the sellers’ identities. In Ontario, the cities of Brantford and Kingston have brought in similar rules to regulate transactions at scrap yards.

A hand holding a small, white stick pictured side a metal cylinder. — An New York Police Department officer places a sticker with a unique serial number onto a catalytic converter. Several regions in Canada have taken a similar approach to reduce catalytic converter thefts. (Ted Shaffrey/The Associated Press)

Meanwhile, several cities are making catalytic converters more traceable by offering free etching of the vehicle identification number (VIN) into the car part.

In Surrey, B.C., for example, RCMP say the “You Etch It. We Catch It” program helped bring down catalytic converter thefts by 76 per cent in the third quarter of 2023, compared to the same period the year before.

The risk-reward dynamic

Mirko Draca, a professor in the United Kingdom who has has been researching the economics of crime for more than a decade, says you can draw a straight line between declining metal prices and the reduction in catalytic converter thefts.

“Prolific criminals are very plugged into the market of stolen goods. They know how these price variations work, particularly on metals,” said Draca, a professor of economics at the University of Warwick.

To predict and prevent future spikes in catalytic converter thefts, Draca says it’s important for law enforcement agencies to keep a close eye on global metal prices.

The same recommendation was made in a study published in May, which analyzed data from police reports and social media complaints in eight cities in California. It found a 10 per cent increase in the value of metals like platinum, palladium and rhodium results in a 20 per cent increase in catalytic converter thefts.

The report conducted field interviews with active metal thieves who said they “kick into overdrive” and “take a lot more risks” when prices go up.

A team of researchers led by Draca came to the same conclusions in 2019. In a paper published in the Review of Economics Studies, Draca compared metal thefts in London to metal prices over a 10-year period and found a strong correlation between the two.

“Prices go up, crime goes up. Prices go down, crime goes down,” he said.

“In terms of chasing incentives, the only people more rational than criminals are academic economists.”