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Thieves Mine Catalytic Converters for Metal More Valuable Than Gold

As palladium prices soar, criminals are on the prowl for the emissions-control devices

Soaring palladium prices are inspiring an unusual band of criminals: catalytic converter thieves.

The exhaust-control devices common in most cars contain the silvery white precious metal, whose prices have climbed more than 50% since mid-August. Palladium is now more expensive than gold.

A supply squeeze, stricter environmental standards and the increased demand for cleaner-burning gasoline engines—which require converters with more palladium—means demand for the metal both among auto makers and thieves is likely to remain high.

Police in Chicago say perpetrators, who harvest the devices and sell the scrap metal, have converter theft down to a fine art.

“What tends to happen is that in the middle of the night, a group of guys come by with a truck and a reciprocating saw. They cut out the converter, throw it in the truck and drive away,” said Howard Ludwig, public information officer at the Chicago Police Department.

“They’ll tend to hit several blocks in the same evening with at least one guy driving the [getaway] vehicle and one underneath the car.”

Catalytic converters sit in the undercarriage of a car between the engine and the tailpipe, capturing toxic gases and particles. They use metals such as palladium, rhodium and platinum to transform the pollutants into less harmful types of exhaust.

“We’ve had three different sets of parking lots hit, and they usually get four or five vehicles each time,” said police Lt. Chuck Nagle in Vestavia Hills, Ala., a small city outside of Birmingham.

“They’re usually taking them out of state and getting anywhere from $150 to $200 at a clip….They’re not selling the part. They’re selling the metal,” Lt. Nagle added.

His department has tried and failed to track down the devices to scrapyards. He figures thieves are taking the devices to other states where scrapyards don’t require showing identification, which can be a deterrent to thieves trying to sell stolen parts and materials.

“It’s mainly produced as a byproduct from platinum in South Africa and nickel in Russia, so a price increase does not necessarily lead to higher mine production,” said Carsten Fritsch, a commodity analyst at Commerzbank.

The tarnished reputation of diesel vehicles following the Volkswagen emissions scandal has only boosted demand for cleaner-burning gasoline engines. Because those engines require converters with more palladium, the price has soared—as has theft on both sides of the Atlantic.

While there are no hard statistics on catalytic converter crimes, London’s Metropolitan Police said in a statement that since September last year, they have become increasingly concerned about the rise in thefts of catalytic converters.

George Crosbie, a 67-year-old retiree in Southeast London, was heading out for a round of golf in December when he noticed something wrong with his Toyota Prius.

“It wasn’t until I moved forward that I thought there was a Harley-Davidson behind me. There was a horrific roar, and I realized it was my car,” he said.

Located near the converter on many cars is the muffler, required as standard since the 1990s. The muffler can be damaged or ripped out with the catalytic converter.

Mr. Crosbie had to pay £800 ($1,035) to repair his car. The theft was one of several that swept through his area. His neighbor, Duncan Chapman, found his Prius had also been targeted.

“They got it out completely,” he said about the converter. “They took out the silencer too, and it was a throaty roar for a Prius.”

There are about two grams of harvestable palladium in a Toyota Prius converter, which can fetch up to around $450 at scrapyards, according to an autos scrap specialist at European Metal Recycling, a U.K. company.

It is relatively straightforward to steal a catalytic converter. Several videos on YouTube demonstrate the ease with which burglars can jack up a vehicle, pry away the converter and be gone in a matter of minutes.

During the commodity-price boom in 2008, theft of metal objects, including beer kegs, manhole covers and even art works, became the target of thieves.