The Trouble with Tires

Recyclers are still struggling with ways to make profits from scrap tires.

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August 4, 2001

Blame it all on the reinvention of the wheel. More precisely, blame it on the reinvention of the tire. Ever since the introduction of synthetic rubber and the advent of the radial, tires have just simply been tough to recycle. Today’s tire is a composition of fiber and steel reinforcements, all cured within the confines of several different types of rubber compounds and other unique materials. Tires are built to last, as some are now guaranteed up to 100,000 miles. That in itself is a saving of resources, as tires made several decades ago would rarely last beyond the 20,000-mile mark.

Still, tire recyclers are faced with the feat of taking a seemingly indestructible product and breaking it down – sometimes into its basic elements. This involves heavy-duty shredders, granulators and cracker mills, as well as the use of cryogenics and separation equipment that usually has high capital costs. The real feat, therefore, is making a profit in the rubber recycling business, especially when prices for rubber remain sluggish.

FUEL FOR THOUGHT

The most common way to recycle (or dispose of) tires is by burning them for fuel. During 1996, the most recent year for which figures are available, approximately 152 million tires were used for tire-derived fuel (TDF), according to the Scrap Tire Management Council, Washington. The STMC is an arm of the Rubber Manufacturers Association, which is heavily supported by most of the major tire companies.

Overall, the STMC says that 75 percent of the 270 million scrap tires generated in 1996 were eventually recycled.

According to Goodyear Tire & Rubber, Akron, Ohio—which has been a long-time advocate of TDF—at the start of 1997, a total of 107 locations in the United States were consuming tires for fuel and another 96 were conducting or planning test burns. These sites include cement kilns, lime kilns, paper and pulp mills, electrical generating plants, foundries and smelters. While some recyclers view TDF as not true recycling, proponents of using tires as an energy source say that the practice is the only viable means to reduce the nation’s stockpile of scrap tires and to keep pace with the estimated 270 million tires that are discarded annually. In addition, air emissions at plants that use TDF are lower than when burning conventional fuel, such as coal, according to tests submitted to the Environmental Protection Agency, Washington. And, TDF reduces solid waste, as the average passenger tire weighs about 20 pounds.

Also, recycling operations that supply TDF to plants, mills and cement kilns only have to perform minimal processing to shred the tires for delivery. Many end users even accept whole tires. Cement kiln operators in particular like TDF because the steel still in the tire is needed as an ingredient to make cement.

The bottom line is that this type of recycling venture can be profitable if the recycler charges the correct tipping fee to offset processing costs, because the sale of TDF alone usually is not enough. Since most tire dealers charge customers a scrap tire disposal fee, part of this fee can be passed along to the recycler either directly or through government channels if the state or local agency collects the funds.

Producers of TDF reveal that they only get a couple of cents per pound for their product or that they have to give it away for free. This is why the tipping fee is so critical in many cases.

CRUMB’S DOWN

Crumbing tires consumes about 12.5 million tires annually, according to the STMC. This method is the second most popular method of recycling tires (excluding the export of tires, which accounts for 15 million tires annually that are sent overseas for various applications and uses). But while TDF accounts for about 56% of the annual production of scrap tires, crumbing accounts for a mere 5%.

After a promising start, 1997 turned out to be a less than banner year for tire crumb recycling operations in North America. Prices for tire crumb did not trend upward like everyone in the industry had hoped, and over capacity in the market forced several producers to close their doors. Some marketing strategies stalled for products such as Crown III, a top dressing for golf courses and athletic fields that uses large amounts of tire crumb; and Rebound, a crumb-based soil amendment that is tilled into the top soil before grass is planted.

A survey of several producers of crumb throughout the country pegged prices of the two most popular size ranges of crumb at 8 to 10 cents a pound for one-eight to one-quarter inch crumb, and 12 to 15 cents a pound for 20 to 30 mesh. Naturally, as the mesh size gets higher (meaning a smaller particle size), the cost rises per pound. The 1/8 to ¼ inch size is ideal for soil amendments, while the 20 to 30 mesh and smaller sizes are used for moldings. Compared to the same time last year, prices have stayed about the same.

“You can’t make money at these prices,” says Cornelius Snyder, owner of JaiTire, Denver. “The current price structure is only allowing about 1 or 2 cents a pound profit, and that is ridiculous. And producers are still willing to drop their prices. One producer that I work with wanted to sell his product for 5 cents a pound, about half the market price, just to get a contract. I told him don’t you dare, or you will cut your own and everyone else’s throat in this market.”

The current price structure is probably the main reason there was a fallout in the crumbing industry toward the end of last year.

“The shakeout in the tire crumbing business certainly accelerated in the second half of 1997,” says Ben Tan, owner of Tan Enterprises, Canton, Ohio, who brokers about 2 million pounds of crumb annually and has been in the business for more than eight years. Tan also has a small crumbing operation of his own. “I know of at least five major crumbing operations that shut down in California, Ohio and Texas. The most recent one was RTI in Georgia.”

Tan sees the exit of these companies as both good and bad for the industry. “In the near term, that means those crumbing operations still in existence will most likely enjoy better pricing; however, it is also a sign to current and potential end users of crumb that this is still a very unstable industry.”

Traditional markets for tire crumb have been low engineered products such as mats and tire flaps. Other manufacturers have pushed crumb into higher engineered products such as shoe soles, weeping garden hoses and parts for autos. Crumb has even been combined with special binders and plastic to form new types of materials.

One market that is on the verge of taking off, according to Tan, is hot patch roofing and sealants that are currently transitioning from tar-based products to rubberized ones.

A spin-off from these products is a rubberized product that is sprayed on exposed steel girders of bridges as a protectorate. “The potential here is great,” says Tan. “In Ohio alone there are more than 6,000 steel bridges that can be coated with this rubber-based spray that is also water based. The spray comes with a seven-year warranty.”

Other potential huge markets       include floor backings and under-layments that are now mostly foam, and new tire production. “The problem is that manufacturers in these industries do not want to make the transition to recycled crumb rubber because they know the infrastructure cannot support them,” he says. “They feel if they make the switch, the supply will be unable to keep pace with the demand.”

Another part of the problem is that there is no standard for processing crumb. “Everyone has their own unique system that they have modified and tweaked,” says Tan. “So, the end product varies from operation to operation. That, I feel, is unsettling to many major end users.”

CROWN TARNISHES

Applications of crumb rubber that were hyped last year as potential saviors of the industry were grass turf applications. With these, crumb can be added to the soil or on top of grass to reduce compaction, insulate roots and stems from frost, and aide in aeration and drainage.

Crown III, which is simply crumb rubber sprinkled on top of grass, has been enjoying a premium price of more than twice the market price of crumb used for other applications. “We sell our crumb for about $480 a ton, versus $200 a ton,” says Snyder, whose company is the sole marketer of the patented Crown III in the U.S. and abroad. “And we need that markup to support two levels of distribution.” Snyder says the main market is the golf course industry that is willing to pay the price for the crumb treatment.

However, Snyder’s plans to expand to the residential turf market have stalled, and contracts with municipalities have not materialized either, temporarily tarnishing Crown III’s momentum.

“We still have not gotten that national endorsement that we need,” says Snyder, who licenses Crown III to about 50 dealers in the United States. “Another problem has been keeping the capital coming in to finance our growth.”

Last year Snyder was on the verge of signing ServiceMaster to a contract to use and sell Crown III for the huge residential lawn care market. “We are still negotiating with them and another major lawn care provider.”

Another problem has been convincing municipal purchasing agents to purchase the product. “These people are not risk takers, and its hard to break their purchasing habits,” she says.

Tan, who also sells crumb under the Crown III name, agrees that JaiTire needs that national endorsement, specially for the golf course industry. “Do you realize what an endorsement from someone like Arnold Palmer would mean to your product sales?” he says. “Instead, the marketing for Crown III has been left up to the regional dealers, so the marketing is different from region to region. I don’t think that is good, and it is starting to show.”

Crown III sales reached only 2 million pounds in 1997. Snyder had expected to sell about 8 to 12 million tons annually, according to an interview last May.

A REBOUNDING PRODUCT?

A bright spot for the tire recycling industry in recent years has been American Tire Recyclers based in Jacksonville, Fla.  Its president once told a Jacksonville news reporter “we are trying to make it in an industry littered with failures.”  The company was quick to make a name for its leadership in marketing its recycled products and also for aggressively lobbying for changes at the state level for laws that favored recyclers.

ATR has made inroads in several markets, even hawking tire shreds to horse trainers as a premium ground cover for stalls and tracks. The company also took on the marketing for Rebound, a soil amendment that includes tilling crumb rubber into the top soil to give grass a better bed in which to grow. In addition, the company sells its crumb to the asphalt paving industry in the South.

Recently, ATR installed new equipment to increase its production of crumb. The new line is dedicated to producing crumb treated with a devulcanizing agent called De-Link from STI-K, a Malaysian-based company with an office in Washington. De-Link is a chemical process that promises to break the cured rubber’s sulfur bonds and return it to a virgin-like state. Many chemical and polymer engineers in the industry still debate De-Link’s authenticity, vowing that once rubber is cured or vulcanized, it can never return to its virgin state.

ATR now has a complete lab and chemical engineer to blend and test customized rubber compounds to guarantee customers a quality recycled product. The company expects sales to be large and repetitive once its devulcanization line is humming.

In 1997, ATR processed more than one million tires and produced 13 million pounds of product, making it one of the largest crumb producers in the U.S. The company had sales of $3.5 million. Haulers deliver scrap tires to ATR for a tipping fee. ATR then shreds tires into chips; granulates the chips into 3/8” rubber; magnetically separates the steel for sale; screens the fiber for sale; then, either ambiently (room temp) grinds the rubber into various size particles from 10 mesh (small) down to 40 mesh (very fine) crumb; or, cryogenically freezes (-320 degrees F) and fractures the rubber down to 100 mesh (ultra fine) crumb.

The 100-mesh material is a new product for ATR. Through a partnership with Praxair, Danbury, Conn., the company is able to produce an ultra fine crumb for molding and other applications. “We developed a crumb called SuperFine, which is ATR’s 80 mesh or smaller particles suitable for recycling by blending it back into fresh rubber compounds,” says Tiffany Hughes, vice president of marketing for ATR. “Last year we were able to complete changes to our cryogenic grinding system to produce this 80 to 100 mesh fine crumb rubber.”

ATR recently had its crumb listed at the following prices: 3/8” – $200/ton (10 cents a pound); 10 mesh – $250/ton (12 cents a pound); 40 mesh – $350/ton (17 cents a pound); 80 mesh – $550/ton (25 cents a pound); 100 mesh – $950/ton (47 cents a pound).

 Praxair is one of the largest suppliers of industrial gases in North and South America and third largest in the world. The company is trying to uncover new ways of cryogenic grinding that will produce a finer grade of crumb rubber at a lower cost and higher throughput rate. Praxair chose ATR as a “beta site” where it could do developmental work in a production environment.

As for Rebound, Hughes says that the product currently makes up 30% of the company’s market product mix. “It is our second most popular product,” she notes. “In 1997, we introduced the Rebound Network Organization and signed on four new distributors and hired a national marketing manager and a national sales representative. We currently have three projects ongoing in Ft. Lauderdale, Sarasota, and St. Petersburg. All locations are athletic fields.”

In addition, ATR recently formed a strategic alliance with ProGreens, a nationwide turf services company based in Safety Harbor, Fla., as its national retrofit installer to sell and apply Rebound.

ProGreens applies Rebound with a unique “drill and fill” concept that was demonstrated for the first time recently at the Golf Course Superintendents Show in Anaheim, Calif.

FROM OLD TO NEW

Today’s new tires average about 1% to 2% of recycled crumb, if any at all, but Tan believes that figure could go much higher.

Tan says his sources confirm that most of the major tire companies can use the higher recycled crumb percentage but are not satisfied with the current quality or the supply system.

Michelin North America, Greenville, S.C., is one tire producer that has openly communicated that it has been experimenting with various amounts of recycled crumb in the manufacturing of new tires for the past several years. Michelin has tested tires with 5% crumb and higher levels (note: this is a percentage of the rubber weight of the tire, not the total weight).

“Testing is now finished and we are going ahead with production of tires with the 5% recycled crumb as original equipment for the 1999 Ford Windstar,” says Clarence “Red” Hermann, of Michelin’s public relations department.

Hermann says that it is the automakers, like Ford, that are driving the push for more recycled content in OE auto parts.

Hermann would not say where the supply of crumb was coming from, but verified that it was from an independent source. “Several suppliers have approached us with samples, but we have to make sure that the supply is there and that the quality is there, too.”

According to Hermann, Michelin is the only major tire manufacturer that has reached this level of use of recycled crumb. And, although the automobile manufacturers are demanding the higher recycled content, Hermann says that Michelin studies have shown that the public does not really care about recycled content in tires. “They want tires that are good and not expensive,” he says. “Normally, the label of recycled-content has a stigma of inferior quality, and we don’t want that.”

It is for that reason that Michelin is not bragging too loud about its recycled content tires. The tires will not even have any special designation to identify them as a “recycled content” product.

With the average 20-pound passenger tire having about 13 pounds of rubber, each of the new Michelin tires will have about 10 to 12 ounces of recycled crumb. That may not seem like a lot, but if every passenger tire made in the U.S. had that percentage, than the market for recycled crumb in new tires would be more than 150 million pounds annually.

RUBBER INROADS

Just as inroads are being made in new tire production, recycled crumb use in the roads we all drive on is also regaining lost ground. Several years ago, scrap tire recyclers were ramping up production to meet the demands of a much anticipated federal law that would mandate states to use a certain percentage of recycled crumb rubber in all federally funded asphalt paving projects. But the goose never laid the golden egg. Soon after the mandate passed as part of the Intermodal Surface Transportation Efficiency Act (ISTEA), the National Asphalt Pavers Association, Washington, reportedly lobbied hard to kill the measure, and eventually had the mandate overturned.

“The mandate caused hard feelings with many organizations that should be natural allies with the asphalt-rubber industry,” says Jeff Smith, president of the Rubber Pavements Association, Phoenix, Ariz. “It left an extremely negative impact with agencies. Overcoming the negative impressions left by the ‘patented, proprietary product’ era of the industry and the bitter charges and counter charges that ensued during the ISTEA debate was a major challenge for the industry.”

Since the ISTEA mandate for the use of rubberized pavement and its subsequent repeal, RPA has refocused its efforts away from federal activities and toward state and local agencies and customers who can benefit from rubberized pavement. That’s because some states and private asphalt producers pushed on with the use of crumb in roads, and were successful in its application.

In particular, the expiration of patents for mixes and paving techniques has opened up the industry to a wider range of contractors. “The entrance of companies such as Granite Construction, which is one of the nation’s largest; FNF Construction Inc., one of the southwest’s fastest growing companies; Meadow Valley, which is also a leader in the southwest; and International Surfacing Systems, a subsidiary of Basic Resources in California; indicates the industry has great potential,” says Donna Carlson, executive director of RPA.

Also, the industry growth has created a demand for, and produced, better equipment that allows contractors a much higher and more efficient production capacity. The latter has allowed the contractor to be more competitive with conventional and other modified materials, and has led to a significant reduction in the cost of asphalt-rubber paving materials, according to Carlson.

The industry has also formed advisory and technical advisory committees that are comprised of some of the nation’s leading experts in research and field use of crumb rubber modified asphalt pavements, says Carlson. Included are Gary Hicks, Ph.D., Professor Emeritus, Civil Engineering, Oregon State University; Jon Epps, Ph.D., University of Nevada, Reno; Professor Carl Monismith, University of California, Berkeley; George Way, Pavement Services Engineer, Arizona Department of Transportation; Jack Van Kirk, recently retired Caltrans asphalt-rubber expert; Joe Cano, retired Engineering Supervisor, City of Phoenix, Ariz. (the nation’s largest municipal user of rubberized pavements); and Gene Morris, retired Arizona Department of Transportation Research Director. “Many of these advisors have more than 35 years of experience in asphalt-rubber technology,” boasts Carlson.

Overall, it is estimated that about 13 million tires were utilized in rubberized asphalt hot mix in 1997. This does not include crumb rubber utilized in spray applied applications, which probably adds another two million tires to the total. In terms of total use of asphalt hot mix (450 million tons) the rubberized mixes account for less than 1%.

Challenges facing the asphalt-rubber industry include so-called “impostor” binder materials that attempt to jump on the recycling band wagon and claim to have the same beneficial properties as asphalt-rubber. In reality, many of these binders use very little rubber and have not been subjected to the same level of construction research evaluation and verification of field performance.

In addition, public agency engineers are often inexperienced in proper utilization of asphalt-rubber and tend to shy away from using unfamiliar processes. “They have also been bombarded with the misinformation that resulted from resentment to the mandate in the ISTEA legislation,” claims Smith, “that asphalt-rubber can’t be recycled, or it is harmful to workers and the environment, or too expensive and hard to work with. These bogus issues have long since been proven false by both federal and state research, and getting the message out is a major challenge for the industry.”

Some states have passed supportive asphalt-rubber legislation. New Mexico, for example, split its tire disposal fee between its environmental agency and the highway department. Funds going to the latter are used to pay the difference in cost between asphalt-rubber and conventional materials. It also provides grants for local agencies. In addition, the law also requires that 95 percent of crumb rubber used in New Mexico highways be derived from the state’s discarded tires.

“It is a unique concept that is being reviewed by other states as a means of market development for their scrap tires,” says Smith.

California is considering a “mini-ISTEA” mandate, and Arizona has legislation to prohibit landfilling of scrap tires and gives its Department of Transportation funds to conduct research on ways to expand its already aggressive use of asphalt-rubber paving materials, according to Smith.

“Arizona, California, Florida and Texas are obviously the leaders in the use of the materials,” he says, “but other states like Tennessee, New Mexico and Oregon, are starting to give it some serious considerations.”

Of all the states, Arizona may be the leader in developing its own strategies on how to use rubber-asphalt. “Arizona’s work is now drawing a lot of interest from other states,” says Smith, “and they are very cooperative in sharing their research and technological advances with other states.”

RECOVERY AHEAD?

Even with the advances mentioned above, markets for recycled rubber are still slow and prices are depressed. The question is, “How long will this trend continue?”

Hughes would not speculate. However, she doesn’t see much relief in sight and says that it is time for rubber commodity prices to recover. “The crumb rubber prices have not rallied, and are currently depressed,” says Hughes.

Despite the price battle, the biggest challenge to the rubber recycling industry still seems to be the development of a stable market.

“The slow pace of market development has not yet caught up with the industry supply,” admits Hughes. “We still have too much supply for the demand. The lead time to develop products and markets is still a challenge. One must concentrate on marketing and servicing existing customers. We continue to work with organizations like the International Tire & Rubber Association’s Tire and Rubber Recycling Advisory Council in Louisville, Ky., to develop markets and inform the industry,” she says. “Recyclers must continue to focus on value-added finished products and seeding the markets, which, in the long run, will be more profitable.”

The author is the former managing editor of Recycling Today and Tire Review.

 

Sidebar

Hitting the Road

How much longer does a rubberized road last over a conventional one?

 

This depends on the application used. Actual life cycle research on hot mix and spray applications is being undertaken by the Rubber Pavements Association, Phoenix.

Unofficial studies of pavements in service in Phoenix—the world’s biggest municipal user—indicate asphalt-rubber seals last 2 to 2-1/2 times longer than conventional asphalt seals, according to “A Twenty Year Study of Asphalt-Rubber Pavements in the City of Phoenix, Arizona,” by Joe Cano, P.E., engineering supervisor for the City of Phoenix Street and Transportation Department.

And how many miles of rubberized pavement have been laid to date (up to the end of 1997)? 

10,420 “lane miles,” according to the Rubber Pavements Association.