Second Quarter 2025: Stability, Resilience & Signs of Stress
Our Markets & Metals feature of Wreckonomics™ series reports on the market performance and the underlying opportunities and stressors for the commodities & supplies derived from Recycled Vehicles. Market performance in the second quarter of 2025 saw influences of global trade disagreements and shifting supply dynamics impact our partner landscape in several ways. We’ll be watching these forces closely but we further expect the continued increase in new vehicle prices, and potentially longer retention of older vehicles due to these prices, could also influence the flow and value of end-of-life vehicles and effect pricing
Aluminum
Aluminum performance in Q2 2025 has seen some interesting movements. Japanese buyers finalized the Q2 2025 aluminum premium at $182 per metric ton, a 20% decrease from the previous quarter, indicating weakening demand amid some pressure on import premiums. However, the overall sentiment in the futures market suggests aluminum prices are fluctuating in the short term, supported by macroeconomic policies. While there’s a strong willingness to adjust prices upward in the market due to rising aluminum scrap costs and tight supply, actual consumption has shown mediocre performance. This suggests a mixed environment where high costs are pushing prices up, but demand may be somewhat constrained.
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
Platinum saw a significant surge in Q2 2025, finishing the quarter with more than a 25% gain. This surge is largely attributed to significant declines in production from South Africa (the world’s largest producer) due to heavy rainfall and ongoing infrastructure challenges, and reduced output from Russia due to sanctions. Demand from the jewelry sector also saw an increase, as manufacturers began using platinum more due to high gold prices related to consumer behaviors.
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. While not experiencing the same meteoric rise as in the pandemic, rhodium was over 15% higher than the first half of 2024. Forecasts from Metals Focus suggest rhodium prices are expected to continue to perform strongly in 2025 due to lower production in South Africa. The market remains susceptible to physical market squeezes due to historically low above-ground stocks.
Crushed Auto Bodies
The most significant indicator of end of life vehicle demand is the sale of whole ‘auto hulks’ processed (environmental handling, parts, cores and rare metals retrieved) by auto recyclers to shedding operations for production into recycled content. The primary raw material is the ferrous metals found in these crushed autos. Q2 continued a definite softening of scrap values. Our observations of scrap demand in June showed the lowest estimate average values since March of 2023. Protectionist tariffs on foreign steel was expected to drive domestic production and scrap demand but as yet we have not seen that trickle down to the auto scrap segments. This is despite current messaging that demand from construction and manufacturing is increasing.
Source: Advanced Remarketing Services
Fuel Prices
Fuel prices, while not a metal value, directly impact transportation costs and thus global commodity demand. In Q2 2025, the national average for gasoline generally saw a decline. The average price for regular motor gasoline in May 2025 was $3.15 per gallon, down 0.7% from April 2025 and down 12.6% from May 2024. As of mid-July 2025 (just after Q2), the national average had dipped to approximately $3.14 per gallon, the lowest during summer months in four years. This downward trend is influenced by high imports and somewhat soft summer demand, and is a welcome relief for transportation-reliant industries.
Overall, Q2 2025 presented an interesting and shifting landscape. The used vehicle market mostly strengthened driven by new tariffs. Low value and end-of-life units didn’t follow the same positive growth trends. Precious metals like platinum saw significant gains due to supply constraints. Aluminum had mixed signals with lower premiums but high futures. Fuel prices continued their downward trend. This evolving market requires continued attention, but the overall resilience in certain sectors provides some opportunity for future planning.
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