PGM recycling operations continue to face short term challenges
The global autocatalyst recycling industry remains depressed mainly as a result of the uncertain global economic outlook, recessionary concerns, and higher interest rates that have inhibited consumer demand for new vehicles. Light duty vehicles (LDV) are remaining in service for extended periods of time with fewer vehicles being scrapped.
Reflecting on these factors, the recycling operations fed an average of 9.5 tonnes per day (tpd) for Q3 2023, 46% lower than for the comparable period in 2022. During Q3 2023, 873 tonnes of material was processed, 46% lower than Q3 2022. At the end of Q3 2023, approximately 24 tonnes of recycle inventory was on hand, an 18 tonne decrease versus the Q3 2022 ending inventory of 42 tonnes. There has been a positive cash inflow over the year as inventory reduced from US$320 million (R5.4 billion) at the beginning of Q1 2023 to US$165 million (R3.1 billion) at the end of Q3 2023.
Recent increases in global auto sales have led to upward revisions in 2023 sales forecasts, offering a promising indicator of an uptick in future recycling volumes. Despite these positive developments, the recycling segment continues to face short term challenges, driving efforts to pursue and achieve volume-driven growth. This includes exploring opportunities beyond the traditional autocatalyst feed sources.
