Nick Snyder, Pete Thomas, Scott Pollan, and Aaron Young

Click play on the YouTube video and follow along with the text below.

Subscribe to Converter Reclaim

Nick Snyder:
All right. Welcome everybody here with another episode of CATs Corner with our esteemed guests, Pete and Scott, how are you guys doing?

Pete Thomas:
No complaints today, it's been a beautiful day and really interesting trade today. Nick, what do you think? We saw palladium just fell out of bed for about $57. China came in, palms out. Some of the ETFs were big sellers and as you and I have been discussing the past couple of weeks, we've been seeing China's economy starting... A lot of people are starting to ask some very serious questions right now as to how healthy there are-

Nick Snyder:
And that's what I feel like, the movement and not just the PGM markets, but obviously that's what we're going to talk about. But on everything, it seemed like things I read. Now it's like, where the movement was coming from. Really besides Monday we had a pretty good week on commodities, including PGMs-

Pete Thomas:
Yep.

Nick Snyder:
... and things kind of rebounded nicely, which was-

Pete Thomas:
Oh, I agree.

Nick Snyder:
It would be nice to just see it keep going. I'd like to see platinum get to to 12-

Pete Thomas:
Yeah.

Nick Snyder:
... would be amazing. That would make me very happy, which I feel like it's trying to, every time I think we're going to get there, then it takes a shit on us.

Pete Thomas:
Well, I-

Nick Snyder:
Pardon my French.

Pete Thomas:
It's a thin market, and it's under a lot of pressure. It's easy to see it set back at any time. But, I'm going to agree with you here. I think technically, with the fundamentals, what they are, the demand being what it is it... We just got some numbers today, Scott. 85% of all platinum is used in gasoline engines. So, with that number being released-

Nick Snyder:
Wow, that's just high number. It surprises me-

Pete Thomas:
That's a very high number, and it's very bullish for your industry. There's no question about it. You guys are going to be in good shape over the next 12 to 16 months. I don't see any reason not to stand firmly with you on that platinum and see 1200 in the horizon here.

Scott Pollan:
Yeah. We're seeing support in the current situation and when the wheels of the economy begin to spin again, the demand will push our prices higher.

Nick Snyder:
Yeah, I feel like it's just almost a waiting game to see those markets really take off. It's a matter of us... We buy cores every day-

Pete Thomas:
Right.

Nick Snyder:
That's what Aaron's out there hustling that-

Pete Thomas:
[crosstalk 00:02:46]. We appreciate that Aaron Thank you, man. That's the backbone of our nation, man, not even a question. People don't give enough respect for scrapers do-

Scott Pollan:
[crosstalk 00:02:54]. They don't understand.

Pete Thomas:
Yeah.

Nick Snyder:
Exactly-

Scott Pollan:
They just don't understand.

Pete Thomas:
[crosstalk 00:02:58]. They're always surprised when they see you guys have teeth.

Nick Snyder:
I got all of mine-

Aaron Young:
I got a gap, but it's working.

Nick Snyder:
We're just trying to run things legit. The number one thing that we're trying to do with converter reclaims is deal with legit businesses. That's why we're here. We're here to give people a real option to move their units in a fashion where they can... Aaron will set them up with a box. That's what he is going to do tomorrow, to go pepper Utah, with a bunch of boxes and then he's saying businesses. He's not handing Joe Schmo in a garage. Because that's the last thing we want. We want to help solidify this business and make it legit and shed a light on... One thing I always wonder, you always hear that cars are one of the most recycled things in America. So what's on every car, a catalytic converter.

Pete Thomas:
Oh, absolutely.

Nick Snyder:
But, it's one of the most recycled things in America.

Pete Thomas:
And the wire in the car, before, if you-

Nick Snyder:
No wire.

Pete Thomas:
... remember, they'd just crunch them up and throw them out. Now it's all stripped out.

Nick Snyder:
Some people are using the scorpion to clean them all up.

Pete Thomas:
Yep.

Scott Pollan:
Even the foam in the seats gets recycled.

Pete Thomas:
Yeah.

Nick Snyder:
Gotcha.

Pete Thomas:
Well, but-

Scott Pollan:
Bumpers, [crosstalk 00:04:18] and bumper plastic. It's a hot commodity-

Pete Thomas:
Germany as passed the law. They just said, "Look it, if you want to sell a vehicle, manufactured in this country, it has to be 79% recyclable." That's huge. There's really almost-

Nick Snyder:
That's good.

Pete Thomas:
... nothing on the car that isn't consumed.

Nick Snyder:
That's good.

Pete Thomas:
Yeah.

Nick Snyder:
So really, we talked lot us Monday. We'll probably get this out for all our viewers on Tuesday, to be honest with you.

Scott Pollan:
Terrific.

Pete Thomas:
Mm-hmm (affirmative).

Nick Snyder:
But that being said, we saw a decrease, beginning of last week, we saw it really, if I remember correctly, things rebounded quite nicely.

Pete Thomas:
Yes.

Nick Snyder:
Why was there such a rebound? Is it just a simple demand for the of product still?

Pete Thomas:
100%, Nick.

Nick Snyder:
I didn't know if there was something else involved.

Pete Thomas:
No, I'll tell you what you and I have had this discussion before and it still holds pat. The thing is that production has not increased. So, the net consumer with Honda, Toyota, people like that, when they... The COOs now, and in three weeks I'm doing Tradefox to talk to a lot of COOs out there and when we see platinum, palladium hit support numbers in our mind, which is 24 to 25, they're buying it for consumption. They're not speculating, Nick. They're saying, "We want delivery," and that makes it a different market. It's a more legitimate market. There aren't players in there knocking it around. So, when the speculators come in and sell a market down, it gets bit up because guys want to own it.

Scott Pollan:
Yeah. Everybody's bids, at least on palladium, 2,500 bucks, you saw those buy orders start coming in and hot-

Pete Thomas:
Gotcha.

Scott Pollan:
... and there was a flash crash and that stair stepped all the way right back up.

Pete Thomas:
Yep, and the flash crashes now are being used as buying tools versus... There are people running around with their hands in the air going, "The sky is falling-"

Nick Snyder:
I like that term, the flash...

Scott Pollan:
Flash crash-

Nick Snyder:
I'm going to start using that.

Scott Pollan:
... in early traded hours, there's a time in the day, of the trade day, when you can use the bid and ask and algorithms to hammer the price.

Pete Thomas:
Here's the other nifty thing on the tornado platform, which you're on. You could put in a bid at any price, at any level. So you could put resting orders in a $100, $120 lower to buy product. And if it happens to break in the middle of the night, you get it. So-

Nick Snyder:
Gotcha.

Pete Thomas:
Yeah. So there's tools out there to utilize for these flash crashes, which come out of Asia.

Nick Snyder:
To protect people when you have a lot of units, things like that-

Pete Thomas:
... to protect the big break and also on the flip side, for the people that are net consumers for manufacturing, to buy product cheaper than where it is.

Nick Snyder:
Gotcha, so both sides could use it.

Pete Thomas:
Yep. Scott, I wanted to ask you, on one of our last shows with Nick, we were talking about New Jersey, any headway or any progress on the regulations on auto CATs?

Scott Pollan:
We were talking about this before, where it's best to address on a state to state level.

Pete Thomas:
Right.

Scott Pollan:
And right now they're in discussions to... In each state's legislative body the goal is to amend existing acts and not pass new laws. And-

Pete Thomas:
Okay.

Scott Pollan:
... that's where they're at in the stage, is the bill came through for discussion-

Pete Thomas:
Right.

Scott Pollan:
...now they're in the discussion stage and it hasn't passed, which is good. Because we want to amend what's already there rather than rewrite and create potential legal loopholes.

Pete Thomas:
Okay. [crosstalk 00:08:16]. So in other words, rather than having sweeping federal changes and have them go into committee and meetings for another three years, we'll take what we've already passed in our state. For example New Jersey, and say, "Okay, all auto CATs are now going to have a VIN number stamped in them, and that'll be the amendment, and then boom, it's done.

Scott Pollan:
Well, I don't know if they're going to go to the length of having a VIN stamped on it, but there will be programs in place. There already are programs in place, where if you want to have your VIN written and etched into your catalytic converter, they'll do that at your muffler shop. You can go down and ask them to do it, they'll do it for you.

Nick Snyder:
Yeah, that seems more realistic-

Pete Thomas:
[crosstalk 00:09:01]. I don't think what's going to... Nick, do you? I think it's going to have to eventually end up with the manufacturer, when they're running down the line. It's just much easier and-

Nick Snyder:
It's going to be so hard for a manufacturer to match a... Unless they etch it in afterwards, that's the only way to do it. Right?

Pete Thomas:
Right.

Nick Snyder:
They'd have to etch it in on the line. We're always watching it just so-

Pete Thomas:
I know you are.

Nick Snyder:
... follow the regulations and help where we could. Because, like I said, "We only want to deal with reputable businesses and legit guys. The last thing that any scrapyard out there wants to do it deal with shady customers. That's where the big misconception of our industry is, that's the last thing we want.

Scott Pollan:
And, Aaron knows what a shady customer looks like. We know how to spot that-

Aaron Young:
Yeah, exactly.

Scott Pollan:
... and those are the discussions that happen with ISRI is, because we're professionals and we know how to do business, we know when someone's trying to fence something. The question is how do you build a recording process so that if something comes [inaudible 00:10:11], it's documentation-

Pete Thomas:
That is the question-

Scott Pollan:
... a documentation question now.

Nick Snyder:
Yeah, absolutely-

Scott Pollan:
We'll come and people much smarter than all of us are going to find that answer. They're working hard even when we're hanging out and fishing, because that's why we have a team that works together to find answers for us.

Nick Snyder:
Yeah, we got to work together to help crack the [inaudible 00:10:31].

Pete Thomas:
Oh yeah.

Aaron Young:
[crosstalk 00:10:32]. I think that's why we at Converter Reclaim are trying to be super transparent for when that legislation passes.

Pete Thomas:
Right.

Aaron Young:
We're positioned as a professional transparent organization to take the lead from that point rather than, we'll buy anything that we see. So, we're spending a lot of money to be transparent. I.e., me on the road. It's not a cheap thing for our organization to do, so we're in it for the long haul.

Pete Thomas:
Well, Aaron, and all that does is make the industry stronger. If the bad guys out there know that if they're out there cutting catalytic converters off, they got nowhere to take them. That sort of ends the problem. It's an end game, and if the scrappers out there that are doing size know that they're not going to have a place to receive stolen merchandise. Because, the last thing you guys want is a cop showing up at your door going, "Give me all that stuff. I'm taking it back." Because you paid-

Nick Snyder:
Exactly.

Pete Thomas:
... for it and put it in. It's just the lose, lose for everybody.

Scott Pollan:
Well, and Pete, usually how it goes, is the scrapyard calls the cops and says, "Hey, we got this. We got something going on." Very rarely, is it the other way around.

Pete Thomas:
That's well put.

Nick Snyder:
Absolutely. [crosstalk 00:11:55].

Aaron Young:
We're actually part of the solution that people don't realize. They think we're part of the problem because we're buying it and recycling it, but we're a big data port for the police when something goes south.

Pete Thomas:
That's interesting. [crosstalk 00:12:10]. So in effect, you're self regulating.

Aaron Young:
I think so.

Pete Thomas:
Yeah.

Aaron Young:
What do you think Nick?

Nick Snyder:
To a certain extent, we're trying to be like, Aaron hinted at, as transparent as possible and work with-

Pete Thomas:
Right.

Nick Snyder:
... whoever we need to work with, and I've been currently reaching out to ISRI for our organization, Converter Reclaim, to join. We want to be part of the discussion so we can-

Pete Thomas:
Oh yeah.

Nick Snyder:
... have a seat at the table to help have a realistic pro, fix to it. That's where sometimes you get people in there that don't deal with it, like we do on a daily basis, they don't really know. They might set something up that just isn't going to work. I'd rather have a seat at the table to help with that. So, we're in the works of doing that.

Pete Thomas:
That's terrific, and it's a good organization. We know the people there for a long time-

Scott Pollan:
Brady-

Pete Thomas:
... and I think you'll be-

Scott Pollan:
Brady is a great guy.

Pete Thomas:
Oh yeah. I think you guys will be adding a lot of flavor to it too because, like you're saying, you guys are the end user and the end recycler. It's very important to have that flavor in, so that they can look over to someone and say, "Hey, what do you think?" And, you will be able to share with them how it's going to impact everyone in the industry that are recycling.

Nick Snyder:
Yep.

Pete Thomas:
Fantastic.

Nick Snyder:
All right. Well, anything else to add anybody?

Scott Pollan:
Yeah, I'm just sitting here looking at the charts for the 10 year treasury and the dollar index. And if you want to have some fun later, just pull up your platinum chart and your palladium chart and your silver chart and your gold chart, and then have your 10 year treasury and your dollar index out. And, see if you can draw some conclusions on your own. I'm not going to tell you what to do, but I think if you were to look at those charts, it might give you an idea of some of the-

Nick Snyder:
So, is this a homework assignment, that you just gave us?

Scott Pollan:
Yeah.

Nick Snyder:
Because I'll do it.

Scott Pollan:
I want you to go to your house, pull out your weekly chart-

Nick Snyder:
All right, I'm on it.

Scott Pollan:
... print it out, take your ruler and...

Nick Snyder:
Okay.

Scott Pollan:
That's how we roll.

Nick Snyder:
Actually, I run those from time-

Pete Thomas:
I know you do.

Nick Snyder:
... to time to see the trends, to see the cycles happen. How consistent is, is kind of freaky.

Pete Thomas:
If you get it right, this Saturday night swing by the boy's shop and maybe they'll give you a Modelo during the MMA fights.

Nick Snyder:
Oh, there we go. I like it. That's a great plan.

Pete Thomas:
Yeah.

Nick Snyder:
There we go. It's Modelo time.

Pete Thomas:
Absolutely.

Nick Snyder:
All right, gents. I'll let everybody go. Get-

Pete Thomas:
Thanks-

Nick Snyder:
... on with. Everyone have a great week. Let's do this again in a week. Okay?

Pete Thomas:
Sounds like a plan, Nick. Nice seeing you. [crosstalk 00:15:02].