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War in Ukraine could mean precious metal shortages, and thus, more catalytic converter thefts

CHICAGO (CBS) -- Catalytic converter thefts have been on the rise for years and now, and economists and chemists warn the war in Ukraine could make the problem even worse.

The reason is that precious metals inside the catalytic convertors often come from Russia. As CBS 2's Tim McNicholas reported, a scarcity of those metals can affect the value, and street value, of catalytic converters.

Christian Moreno's security video shows someone pull up next to his black sport-utility vehicle this week in West Lawn. Then, a flashlight is seen being switched on underneath the SUV as thieves cut off his catalytic converter.

"It's really frustrating. People around the city – including myself – sometimes live paycheck to paycheck," Moreno said.

A day later, less than a mile away, thieves cut off another one.

"We have to get it to a shop to get that repaired," said another victim, Elsa. "Right now, it's not an expense that anybody would need or want."

It is of course unwanted, but it is far from unprecedented. A spokesperson for State Farm said the insurance company paid nearly 2,000 claims for catalytic convertor thefts in Illinois in 2021 – up from 480 in 2019.

"It's going to cost me $800 to $1,400 to fix it," Moreno said. "I mean, how would you feel?"

And the problem could soon get even worse. Catalytic converters are valuable because they contain rare metals – of which one is palladium (Pd).

And about 40 percent of the world's mined palladium comes from Russia. Economists and chemists alike say sanctions will create an increased demand – even on the underground market.

"We might expect at least in the short run, until alternative sources of these metals can be found, that we'll see the prices for the metals go up – and therefore, the value of catalytic converters goes up – and perhaps in response, the thefts of catalytic converters," said University of Chicago economist Chad Syverson.

"We see all the horrible things that are happening in Europe right now, and we see these sanctions on Russia – that's providing a really intense price pressure on palladium," added University of Chicago chemist John Anderson.

Now, Moreno wants scrap yards and anyone else buying catalytic convertors to step up their screening.

"Probably grabbing information before they buy these things – you know, who sold them – and they should try do something about it," Moreno said.

And he hopes doesn't see any uninvited guests coming after his catalytic converter again.

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