Second Quarter 2024: Gradual downward momentum continues
As previously discussed, we have been consistently witnessing deflating values of low value and end of life automobiles presented at wholesale. Based on our index observations, the trend was nosing us in the direction of pre-pandemic values. So let’s take a look
Wholesale Used Automobile Performance
On the wholesale front, Q2 continued a sustained slide in wholesale used vehicle values. This is most definitely a continuation of the slide started in 2022 off of record values. In Q1 of 2024, wholesale used-vehicle prices dropped from the end of last year. This was the first time the Manheim index reading has been under 200 since March 2021 See the Manheim index below:
ARS Low Value Vehicle Index
ARS maintains our own observational price index for vehicles at the lower end of the spectrum. We look at high mileage, high year, and end of life vehicles presented at wholesale and monitor the market performance. The data sample that drives our index is from many points of sale throughout the vehicle remarketing industry.
The performance generally has followed the downward trend of the used vehicle market but as our particular segment didn’t have the same dollar growth that the wholesale average value experienced, our trip down is a bit shorter for end of life vehicles. The slight market improvement we saw in Q1 was largely erased..
Source: Advanced Remarketing Services*
Crushed Auto Bodies
Q2 crushed auto bodies values were surprisingly stable seemingly following construction and manufacturing demand remaining consistent.
Source: Advanced Remarketing Services
Aluminum
Keeping an eye on Aluminum performance, we saw a uptick in early q2 that continued YoY through the end of the quarter ending in June up over 10% YOY. Will be interesting to see if this demand continues.
Rare Metals Market
In automotive recycling the most valuable minerals retrieved are derived from recycling of Catalytic Converters. Platinum, Palladium and Rhodium specifically. The presence of these rare metal nanoparticles act as a ‘catalyst’ and help to convert hydrocarbons, carbon monoxide and oxides of nitrogen into less harmful carbon dioxide, nitrogen and water vapor. For over 40 years Catalytic Converters have been the ‘big gun’ and most impactful contributor to the efforts to reduce carbon emissions from internal combustion vehicles. Unfortunately their small but important contributions have never been able to fully offset or arrest carbon emissions entirely but the continued use and regulatory requirements make the markets for these rare metals remarkably important benchmarks.
Platinum
Taking a look exclusively at the performance of platinum through the pandemic and up through Q2 2024, we see a trend that feels very much like a return to normalcy. Down again month over month but keeping mostly in line with expectations.
Rhodium
Once again let’s check in on the star of the pandemic circus; RHODIUM. Every year approximately 30 tons of Rhodium is used in Catalytic Converters. Approximately 30 to 50% of this comes from recycling. During the pandemic rhodium scarcity caused a giant spike in prices, and led to huge increases in Catalytic Converter costs and also surely inspired a uptick in converter theft. However those heady days are long gone and current demand has stabilized.
Fuel Prices
Though technically not a metals value, fuel prices and transportation costs are impacting global demand and use of most of the still in-demand commodities. While fuel prices are traditionally seasonally affected, we did not see much increase at the start of our summer season. At the end of Q2, the national average for gasoline was $3.46 down 3% from the same time last year and down 30% from the historic highs 2 years ago in June 22.
Overall, was a relatively quiet Q2 2024, continuing a trend from the previous quarter. This relative stability is something we haven’t seen in years. This stability makes it easier than ever to plan for the future.
If your organization has a consistent volume of low value, high mileage and older vehicles, we should talk. Reach out to any of our team directly or email us at arsinfo@arscars.com