Aftermarket must brace for cost pressure as precious metal prices soar

BM Catalysts is urging the aftermarket to prepare for renewed cost pressure as raw material prices rise sharply once more. Ongoing volatility across all three platinum group metals (PGMs) – rhodium, palladium, and platinum – is driving up the cost of production, which is expected to necessitate pricing adjustments across the company’s catalytic converter range in the coming months.

While rhodium remains the most expensive of the three, recently trading at over £18,000 per troy ounce (more than ten times the price of gold), both palladium and platinum have also seen significant price increases in 2025. Palladium has climbed over 15% year-to-date, and platinum has seen its value rise by more than 10%, driven by tightening global supply and surging demand linked to more stringent emissions standards worldwide.

All three metals are critical to the operation of catalytic converters, which use combinations of these elements to reduce harmful pollutants from vehicle exhaust emissions. “The aftermarket cannot ignore that PGMs – especially rhodium, but also palladium and platinum – make up to 90% of the total production cost of a catalytic converter,” explains BM Catalysts. “Pricing is therefore directly tied to the fluctuating value of these essential raw materials.”

Demand for catalytic converters is expected to remain strong, yet supply of PGMs – especially rhodium and platinum – continues to be restricted. More than 80% of the world’s rhodium supply originates in South Africa, where production is regularly disrupted by power shortages, labour unrest and ongoing political instability. With global automakers still relying on these metals to meet emissions standards, the current pressures show no sign of easing in 2026.

As PGM prices spike, so too does criminal activity. The UK is again seeing a surge in catalytic converter thefts, particularly from hybrid vehicles, which tend to contain higher concentrations of PGMs and are more accessible. Insurers and police forces are reporting rising claim levels and damage incidents.

BM Catalysts advises workshops, fleets and independent garages to remain vigilant and proactive. “Theft prevention is a critical issue when metals are at a premium,” the company adds.

Despite these pressures, BM Catalysts is continuing to invest in smarter sourcing, leaner stock planning, and flexible procurement strategies to help minimise the cost impact on customers. The company has adapted its buying approach to remain responsive to market changes and maintain its commitment to fast delivery, consistent quality and long-term reliability.

“Unlike the speculative price bubble of 2008, today’s pricing is underpinned by structural demand, not just market sentiment,” BM Catalysts notes. “We anticipate this environment of elevated pricing to remain for the foreseeable future – and while short-term corrections are always possible, sustained cost pressure is now the new normal.”

Importantly, the company has pledged that any price increases will be market-based, justified and transparent – reflecting real cost inputs, not margin enhancement.

BM Catalysts is calling on distributors, motor factors and garages to communicate openly with their customers about the drivers behind potential price changes. “These are not supplier-led increases – they are part of a global commodities shift affecting every emissions product manufacturer,” the company explains.

With PGMs continuing to dominate the cost of production, the aftermarket must plan accordingly. That means focusing less on up-front price and more on total product value – quality, reliability, warranty support and availability – particularly in the emissions control sector, where failure can cost far more in the long term.