I visited my friend who was vacationing in the Bay Area this summer and while we chatted on the hotel patio, our conversation ended up sounding like a bad cellphone connection. I apologized for asking her to keep repeating things, but I thought it was so obnoxious that people are actual revving up their car engines and racing every 30 seconds near a hotel parking lot.
She says, “It’s not car racing, it’s theft.”
She then points out that a huge number of cars in the area have experienced massive theft of car parts, and this is confirmed with hotel managers and employees. This is not just in the Bay Area — it is a nationwide trend that has seen a dramatic rise in the last 18 months. The pandemic last year started an acceleration of car break-ins, vandalism, boosting (carjacking), and mostly parts theft.
The number one theft item (not surprisingly): catalytic convertors.
It was unbelievably noisy: everyone’s catalytic convertor was stolen. CCs have a lot of platinum-group metals such as rhodium, palladium, and platinum, and are extremely expensive and complicated to mine efficiently.
The number two theft item (surprisingly): car tires.
Tire theft is also increasing due to multiple factors in the used car market. Furthermore, the structural design of cars has changed the accessibility and facilitated theft. Most cars used to have the spare tire in the trunk of the vehicle. Many modern-day SUVs have the tire posted on the back of vehicle or underneath. The quick unlocking mechanism allows for a rapid theft, and car owners do not often check to see if their spares are still there. Many cars stayed stationary during the pandemic, making it easier for thieves and robbers to evaluate security risks and opportunities.
Starting in Part 2, I will go over each of areas in which commodity theft is on the rise, and its interaction with the futures markets.
Edward Kim is co-founder and Chief Research/Compliance Officer at 3LA Ventures. You can contact him at ed@3lavc.com
June 15, 2021
