WASHINGTON (Feb. 10, 2014) — After scrap tire usage in the U.S. dropped off in 2009-2011, the industry is anticipating a rebound in 2014, thanks to strength in markets such as rubberized asphalt and crumb rubber, according to two industry experts.
At the same time, demand for tire-derived fuel (TDF) — which was sagging early in the decade — should enjoy at least a partial comeback this year, they said.
These observations come ahead of the Rubber Manufacturers Association's (RMA) next biennial statistical report on scrap tire usage, which will cover the period 2011-13, according to RMA Vice President Michael Blumenthal.
The 2009 and 2011 RMA Scrap Tire Reports were sobering in comparison with previous versions. The 2007 report showed that 89.3 percent of scrap tires generated in the U.S. found productive end-uses, compared with only 11 percent in 1990, the year the RMA first measured the rates of scrap tire usage.
The 2009 report, however, showed the percentage had slipped to 85.3 percent, and by 2011 it had fallen still further, to 81.6 percent.
"What we're seeing is that there is no clear-cut pattern for the market per se," Mr. Blumenthal said. "Each individual market needs to be looked at, because each one is a little different from the others."
That said, Mr. Blumenthal noted he was encouraged by what he foresees for the different scrap tire markets, including TDF.
"Last year we saw an upswing for TDF in a number of places," he said. "We also saw a lot of current end-users increase the number of tires they are using, especially in pulp and paper."
Although TDF is on the upswing in the north central U.S. and other parts of the nation, it has taken a heavy hit in New England thanks to the closing of the TDF-fueled electric plant of Exeter Energy Limited Partnership in Sterling, Conn., according to Mr. Blumenthal.
"There are 8 million tires Exeter used to consume every year that are now looking for a home," he said. "In the TDF market, it depends on where you are."
Dick Gust, president of national accounts for Liberty Tire Recycling L.L.C. and co-chairman of the Environmental Advisory Council of the Tire Industry Association, also said he expected a brighter picture for the tire recycling market in 2014.
Messrs. Blumenthal and Gust both said that scrap tire exports to Asia and elsewhere had been a major disruptive factor in the U.S. market over the last couple of years, but that now appears to be a spent force.
"The exporting of baled tires created significant concerns for the U.S. processors and created a downward pressure on the collection fees needed by tire recyclers to maintain operating revenue," Mr. Gust said.
But the scrap tire export market declined suddenly in late 2013, when Asian governments banned further scrap tire importation, he said.
With that decline, the U.S. recycling market should stabilize and move forward with both increased use of TDF and expansion of crumb rubber into higher-end markets, Mr. Gust said.
Rubber in the road
One area Mr. Gust said he expects to grow is the recycling of giant OTR tires.
"These tires have not been recycled to their fullest extent in the past, due to their physical size, which created both processing and transportation expense," Mr. Gust said.
"(But) recyclers and manufacturers interested in sustainability are recognizing that these big tires have a lot of rubber that can be recycled and reused," he added.
Among ground rubber markets, Messrs. Blumenthal and Gust saw rubber-modified asphalt as the one primed for substantial growth.
"Rubber-modified asphalt is less expensive than any other modified asphalt, and state transportation departments are using it more," Mr. Blumenthal said. "The question now is how long this will be sustained. Will they continue to use rubber-modified asphalt if the economy changes?"
The rubber-modified asphalt industry held many workshops across the U.S. during 2013 to familiarize stakeholders with the substantial performance benefits of their product, according to Mr. Gust.
"When rubber is used in roads, it provides improved performance, is quieter, provides a safer surface and actually costs less," he said. "It is easy to understand why it is currently being used or evaluated in over 35 states."
Technology improvements in rubber-modified asphalt will make the material even more desirable, according to Mr. Gust.
"Crumb rubber suppliers are recognizing that in order to increase the use of rubber in roads, the supplier needs to reduce the obstacles for use on the part of the contractor," he said. "A technology that could blend the rubber polymer prior to delivery would greatly reduce the contractor's cost.
"In 2014, this blending technology will grow and assist the contractors in expanding the use of rubber in roads."
Among other technologies, Messrs. Gust and Blumenthal were split on the potential for pyrolysis, the technology of breaking scrap tires down into their component oil, carbon and steel.
"The cost to capture the raw material was simply more expensive than the sale of those captured materials could bring on the open market," Mr. Gust said.
"Today, the technologies have significantly improved, the manufacturing costs have been reduced and the market prices for carbon and oil have significantly increased," he said.
On the other hand, Mr. Blumenthal said the economics still aren't there to make pyrolysis a commercial proposition.
"The steel comes out clean, with very little oxidation," he said. "There's a good market for the steel, but in and of itself it won't make pyrolysis viable. It's only 10 percent of the weight of a tire."
The gas produced by pyrolysis can be fed into the system to power it, according to Mr. Blumenthal. But the char produced by the process has never met American Society for Testing & Materials standards for carbon black, and the oil is equivalent to waste oil, he said.
"The question about pyrolysis is not whether it works — it does," Mr. Blumenthal said. "The question is, 'Where are the markets, and will the economics work?'"
For similar reasons, Mr. Blumenthal was not sanguine about the prospects devulcanization.
"You can certainly break down the sulfur bonds in rubber, but Goodyear told me that's only Phase One," he said. Phase Two is separating the different types of rubber that comprise a tire.
"It's like separating the tomato juice out of V8 (vegetable juice)," he said. "If you figure out how to do that, you could conceivably commercialize devulcanization, but so far as we know, no one has done that."
Regarding state scrap tire laws, Mr. Gust said he thinks many state governments are recognizing that they must enforce the laws on their books, rather than raiding state scrap tire funds to replenish state general funds.
Mr. Gust praised Georgia Rep. Randy Nix, who introduced and passed legislation that closed loopholes in Georgia's scrap tire laws. "This action will save Georgia taxpayers millions of dollars in future scrap tire cleanups," he said.
Mr. Blumenthal said he expected little scrap tire-related activity among state governments in 2014.
A scrap tire bill will almost certainly pass in Colorado, the state facing the worst problems with stockpiled scrap tires, but it will probably be three years before the provisions of the Colorado bill take effect, he said.
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How have tire prices been in the last few months?
|They've gone up 1-5%||
|They've increased 6-10%||
|They've stayed flat||
|They've gone down between 1 and 5%||
|They've gone down 6-10%||
|They've dropped more than 10%||